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Abstracts of Discussion Papers: Technical Series
(Previous working papers are available: 1990-99)
REAL 09-T-7
Fragmentation and complexity: Analyzing structural change in the Chicago regional economy
Isidoro Romero, Erik Dietzenbacher and Geoffrey J.D, Hewings
Abstract:In this paper, two dimensions are differentiated within the fragmentation process: a spatial and a functional one. On the one hand, due to fragmentation and industrial relocation, regional and national economies might be losing some internal linkages. This spatial fragmentation determines a decrease in the complexity of the production systems. On the other hand, outsourcing, as a form of functional fragmentation, increases the density of transactions and linkages within an economy. The overall impact of fragmentation on the complexity of the regional and national economic systems depends on the net effect of these two fragmentation forces. In this paper, the effects of fragmentation on the complexity of the economy of the Chicago region are studied from a set of input-output tables estimated for the period 1978-2014 using Average Propagation Lengths (APLs).
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REAL 09-T-6
Housing price equality and mixed communities explained by the process of gentrification: Evidence from Chicago
Laura Atuesta
Abstract:During the decade of 1990s, cities in the US have undergone different gentrification processes. In Chicago, the process of gentrification cannot be studied as a unified phenomenon because the causes and consequences are different depending on the demographic characteristics and spatial location of the gentrified neighborhoods. When the gentrification process involves a mixture of ethnic and income groups, gentrified neighborhoods develop more housing price equality than non-gentrified neighborhoods. This is the case of gentrified tracts in the North and Northwest sides of the city, areas where most of the gentrified neighborhoods are located. While in the North and the Northwest, the gentrification was characterized by an influx of Hispanic population in white neighborhoods, in the South, it was driven by high-income blacks in predominantly black neighborhoods. Using a theoretical model originally developed by Epple and Sieg (1999), empirical evidence of heterogeneity of income and preferences in neighborhoods that have been gentrified will be presented, and housing price equality using quantile analysis will be conducted. The analysis will explore the effects of gentrification on different percentiles of the housing price distribution. Gentrification in the North and Northwest does not affect prices in the lower tail of the distribution allowing the lower-income Hispanic population to enjoy housing opportunities outside their ethnic enclaves, and increasing price equality in gentrified tracts. Keywords: gentrification, housing price inequality, mixed-income neighborhoods, quantile regression.
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REAL 09-T-5
Linking Land Use Planning and Regulation to Economic Development: A Literature Review
Jae Hong Kim
Abstract:This review examines how land use planning and regulation affect the performance of our regional economies and identifies a set of complex causal links that generate the possibility of countervailing effects. On the one hand, land use regulation or planning practice may promote regional economic development 1) by eliminating negative externalities and achieving amenity improvements, 2) by encouraging compact development that delivers not only environmental but also fiscal and economic benefits, 3) by improving transportation outcomes or broadening potential options for travel choices, and 4) by reducing uncertainty and transaction costs involved in the process of land development. On the other hand, it could hinder regional economic prosperity 1) by generating a more dispersed or mismatched pattern of development, if parochial local governments seriously distort market processes, 2) by increasing the prices of developable land, housing, and business spaces dramatically, and 3) by preventing regions from satisfying the increasing needs for labor as well as housing in a timely manner. It is concluded that linking land use planning and regulation to economic development is to seek a better way (in terms of institutional setting, timing, degree of restrictiveness, detailed approaches of the intervention, etc) of managing land use that promotes the positive or dampens the negative effects in a particular circumstance rather than trying to find out a panacea-like policy option.
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REAL 09-T-4
Introducing Input-Output Analysis at the Regional Level: Basic Notions and Specific Issues
Ana Lúcia Marto Sargento
Abstract:This paper reviews the literature on regional input-output model estimation with particular attention to the development of interregional input-output models under conditions of limited information. The review covers simple nonsurvey estimation to more sophisticated approaches drawing on gravity and spatial interaction concepts, bi-proportional matrix adjustments and information theory applications. The review considers issues in traditional interindustry and commodity-industry accounting frameworks.
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REAL 09-T-3
A Methodology to Compute Regional Housing Index Price Using Matching Estimator Methods
Dusan Paredes-Araya
Abstract:This paper proposes a methodology for a spatial cost index of housing that considers spatial heterogeneity in properties across regions. The index is built by combining three different techniques to reduce the spatial heterogeneity in housing: Quasi-experimental methods, hedonic prices and Fisher spatial price index. Using microdata from the Chilean survey CASEN 2006, it is shown that the quasi-experimental method called Mahalanobis metric within propensity score calipers (MMWPS) leads to a significant reduction in the potential bias. The technique matches dwellings of a particular region with other properties of similar characteristics in the benchmark region (Metropolitan region). Once the houses are matched, a hedonic price model is computed, and a regional housing price matrix is created using Fisher spatial price indices. The paper concludes the existence of price differentials for homogeneous houses across regions in Chile.
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REAL 09-T-2
Domestic and Cross-Border Effects of Public Capital: A SVAR Approach for the Spanish Regions
Miguel A. Márquez, Julián Ramajo,
and Geoffrey J.D. Hewings
Abstract:Within the approaches that have been applied to assess the impact of public capital on economic growth, this paper estimates the dynamic effects of public infrastructures using a structural vector autoregressive (SVAR) methodology for the Spanish regions. From a methodological point of view, our work contains different innovative features with respect to the previous studies using VAR models. The most relevant contribution is to propose a new way (through bi-regional models) to estimate the spillover effects of public capital in a region on the economic growth of the rest of regions of the country. From a policy perspective, the results highlight how these new models could contribute to the allocation of public investments in order to give promote balanced regional growth, shedding new insights into the analysis of regional economic growth processes.
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REAL 09-T-1
The Journey to safety: Conflict-Driven Migration Flows in Colombia
Nancy Lozano-Gracia, Gianfranco Piras, Ana Maria Ibáñez and Geoffrey J.D. Hewings
Abstract:While there is a growing econometrics literature on the modeling of conflict and the interactions with trade, there has been relatively little evidence modeling the interregional migration behavior of individuals internally displaced by conflicts. The present paper models the flows of households forced to leave their residence because of violent conflicts in Colombia. Results shed light on the main determinants of what we call journey to safety. Violence appears to be one of the most relevant pushing effects together with the absence of institutions and the dissatisfaction with the provision of basic needs. Furthermore, for regions with extreme violence levels, individuals appear to be willing to relocate to more distant locations. On the destination side, most populated regions are more attractive as well as areas with a sufficient level of fulfillment of basic needs.
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REAL 08-T-5
Agglomeration Economies and Two Contrasting Transportation Costs: Complementary and Substitution Perspectives
Daisuke Nakamura
Abstract: Two contrasting attributes of transportation costs are introduced in this analysis. These are categorized as internal and external to the firm or the industry. It is shown that the trade-off interaction between agglomeration economies and transportation costs in established location theory solely refers to the external nature of transportation costs to the firm. This paper reveals that there is another type of transportation costs which is internal to the firm and plays an important role in the structure of the production linkages within the industry. An alternative model is demonstrated to clarify the roles of these two types of transportation costs as substitute and complementary effects to agglomeration economies.
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REAL 08-T-4
Economic Geography and Spatial Wage Structure in Spain
Jesús López-Rodríguez, Miguel A. Márquez
and Andres Faiña
Abstract: In this paper, the nominal wage equation of a Core-Periphery model of New Economic Geography is derived. In order to show empirical evidence of the resulting hypothesis, the nominal wage equation is estimated for the Spanish provinces in the year 2003. Our results illustrate that the market access variable is statistically significant and quantitatively important in the explanation of the spatial wage structure observed in Spain. Moreover, we show that there are at least three channels through which market access might be affecting Spanish wages: human capital, productive capital and the size of R&D activities.
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REAL 08-T-3
Incorporating Sectoral Structure into Shift-Share Analysis
Geoffrey .J.D. Hewings, Miguel A. Márquez
and Julián Ramajo
Abstract: The objective of this paper is to present a way to incorporate sectoral structure within the measures of regional growth provided by the traditional shift-share analysis. The new tool makes it possible to considerer in the decomposition analysis three new effects: sectoral national effect, sectoral structural effect, and sectoral differential effect. To illustrate the analysis of sectoral structure through this extension of the shift-share method, an application is provided using sectoral data for Extremadura, a Spanish region, for the period 1990-2004. The results highlight how these new effects can shed light on the analysis of regional economic performance.
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REAL 08-T-2
Industrial Agglomeration Effects on Regional Economic Growth:
A Case of Japanese Regions
Akihiro Otsuka and Norihiko Yamano
Abstract: This paper sheds empirical light on the relationship between industrial agglomeration economies and regional economic growth and its impact on the convergence of the regional disparities in productivity. An empirical analysis, based on Japanese prefectural data for the period 1980–2002, indicates that industrial agglomeration has significant effects on regional growth. Furthermore, industrial agglomeration contributes to economic convergence in the manufacturing industry, while it contributes to increasing disparities across regions in the non-manufacturing industry. These results suggest that an increase in the share of non-manufacturing sectors has the potential to create such regional disparities.
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REAL 08-T-1
Regional Business Cycles in Japan
Motonari Hayashida and Geoffrey J. D. Hewings
Abstract: In previous studies of regional business cycles in Japan, there were the critical differences of the amplitudes and the turning points among each business cycle by region. However, there is a problem in the previous studies; they relied on one series, typically an index of industrial production in manufacturing sectors, and neglected the performance of the other sectors in the region. Burns and Mitchell (1946) noted that business cycles consist of a pattern of recurrent, serially correlated and cross-correlated movements in many economic activities. Therefore it is necessary to include information on sectors other than manufacturing in order to provide a more complete measure the business conditions of a region. Specifically, we extract each regional business index from four business indicators using the principal components method, and applied the regime-switching model to identify the turning points in regional business cycles. Our result shows that the sector that relatively generates the greatest influence on the business cycles is different by region. Chubu, Hokuriku, Chugoku and Kyushu are more influenced by production activity and consumption change; Tohoku, Kanto and Shikoku are by production activity and employment situation. Kansai and Hokkaido are influenced by all factors of production activity, consumption change and employment situation. Furthermore, different regions have different features also from the viewpoint of the turning points of business cycles. The average duration of a business cycle in Kanto and Kansai is similar to that of the national cycle while those in Hokkaido, Chubu, Hokuriku, Chugoku and Shikoku are shorter. The share of the expansion phase in Tohoku and Kyushu are higher than that of the nation-wide business cycle.
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REAL 07-T-10
Investment in Human Capital in the Development of Clusters: A Theoretical
Approach
Carlos Eduardo Lobo e Silva and Geoffrey J. D. Hewings
Abstract: The main objective of this work is to analyze the investment in human capital in the development of clusters. The starting point of the analysis is to understand the concept of general and specific training proposed by Gary Becker (1964) in a dynamic perspective, where what begins as specific becomes general as the cluster develops. In the beginning of the process, a cluster is not formed yet and a single firm provides specific training. As the cluster grows and new firms of the same sector come, the training becomes less specific and more general once now other firms can use the skills of those trained workers. Consequently, firms will be less willing to invest in human capital and the suboptimal equilibrium may be overcome only if a third party comes to offer training to all workers.
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REAL 07-T-9
The Changing Structure of Trade and Interdependence in a Mature
Economy: The US Midwest
Geoffrey J. D. Hewings and John B. Parr
Abstract: Four questions are addressed in this paper. First, as regions mature, what happens to their overall economic trade relationships, both internally and with other regions? Second, is the process similar at all spatial scales, i.e. for metropolitan, regional, macroregional and national economies? Third, are regions becoming more alike in terms of economic structure? Fourth, what are the implications for regional competition and policy intervention, as regions become more similar and interdependent? Analysis begins with attention on the Midwest economies, exploring changing in the nature and strength of interregional trade with analysis of changes in intra- and inter-industry trade, specialization and feedback loops. The second part of the paper explores trade relationships within the Chicago region and finds that a different form of spatial interdependence arises. The paper concludes with some evaluation of policy implications.
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REAL 07-T-8
The Locational Implications of Management and Production Fragmentation
Carlos Eduardo Lobo e Silva and Geoffrey J. D. Hewings
Abstract:The main objective of this work is to show that (1) communication costs within the firm and (2) managerial structures affect both the production fragmentation process and the economic specialization of cities. More specifically, as either communication costs diminish or managerial structures become more flexible, manufacturing plants tend to move from the large to medium-sized cities, while headquarters and business services tend to agglomerate in the metropolitan area. Analyzing the internal organization of firms, the present paper adds new dimensions (management and communication costs) to the fragmentation process that have been ignored by the literature.
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REAL 07-T-7
Location, Communication, and Control Within a Vertically Integrated
Firm
Carlos Eduardo Lobo e Silva and Geoffrey J. D. Hewings
Abstract: The main purpose of the paper is to provide a link between the location decision and the internal organization of firms. In the model that focuses on the relationship among agents within the firms, the owner of the firm makes two decisions: who will have the formal authority (the owner or the controller) and where the manufacturing plant will be located (near or far from the owner). The results show that those two decisions are interdependent. More than that, for certain parameters, the corporation goes from the second best to the first best only if it changes the decision about both aspects; changing just either the delegation scheme or location may drive it to an inferior outcome. In these cases, a flexible managerial structure turns out to be a necessary condition for firms to benefit from locational advantages. The positive correlation between the decentralization of decision-making and geographic decentralization predicted by the model is supported by empirical research. Finally the recent headquarter location decision by the Boeing company is used to illustrate the results obtained.
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REAL 07-T-6
Does a Change in Retirement Age Affect a Regional Economy? Evidence
from the Chicago Economy
Seryoung Park and Geoffrey J. D. Hewings
Abstract: This paper continues the exploration of the impacts on an aging population on an economy employing a two region computable general equilibrium model that is linked with an overlapping generations framework. Two regions are specified, the Chicago metropolitan area and the Rest of the US (ROUS). A series of experiments is conducted; first, the impacts of changes in retirement age are considered, incrementing retirement from 65 to age 69. Secondly, the impacts of reduction in pension benefits are examined, reducing the replacement rate from 50% (baseline) to zero percent. Thereafter, an attempt is made to explore some optimal combinations of policies that include changing retirement age, reducing pension benefits and increasing immigration. A final set of experiments explores the impact of retiree out-migration. While the focus of attention is on the Chicago economy, some of the impacts on the ROUS are presented. The results reveal that, in combination, the results are not monotonic – for different policy mixes at one point in time and over time. A larger number of immigrants into the Chicago region and more generous pension benefits do not necessarily result in more desirable (welfare) benefits while an increase in the retirement age turns out to monotonically improve average welfare.
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REAL 07-T-5
Immigration, Aging and the Regional Economy
Seryoung Park and Geoffrey J. D. Hewings
Abstract: Using a two-region (Chicago and the Rest of the US) computable general equilibrium model integrated with an overlapping generations model, the analysis explores the implications for changes in the level of immigration into the Chicago on a variety of indicators. Initially and not surprisingly, wages fall as a result of increased immigration. This finding is consistent with an equilibrium view of a market receiving a supply shock and a fall in the capital/labor ratio; but after 2040, the effects appear to be reversed. One reason for this can be traced to the retirement of the first wave of immigrants but more importantly, increasing numbers of immigrants will provide contributions to taxes that will reduce the social security tax burden and thus increase the after-tax income of native workers. Over time, the model assumes that immigrants and their offspring begin to accumulate skills in such a way that they become undifferentiable from the native population. In terms of regional macroeconomic impacts, immigration would appear to reverse a projected decline in gross regional product that would occur essentially as a result of an aging population with no stimulus provided by immigration. However, in per capita GRP terms, the positive effects only occur once the immigrants (cumulatively) acquire skills to elevate their productivity levels. The Chicago region, under an asymmetric immigration policy (Chicago gains more immigrants as a percentage of its base population than the US as a whole), actually increases its share of Gross National Domestic Product. One might expect that, given these findings, the effect on the social security tax rate would be “positive” in the sense of either muting increases or actually decreasing the rate. This is true until the immigrants start to retire in significant numbers after 2050; this result stems from the fact that over time, the impacts of immigration begin to diminish – a finding that is revealed in the results for the US as a whole
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REAL 07-T-4
Aging and the Regional Economy: Simulation Results from the
Chicago CGE Model
Seryoung Park and Geoffrey J. D. Hewings
Abstract: The first goal in this study is to improve our understanding about economic and intergenerational welfare conditions given the future demographic changes, with particular focus at the regional level. The second goal is to provide the sensitivity of these outcomes to selected policy reforms and suggest the policy implications to both local and federal government. This study would be the first attempt to rigorously quantify the dynamic effect of demographic changes on the regional economies. Attention will be directed to a discussion of the link between demographic changes and their economic impacts, with some empirical analysis derived from the Chicago economy. A review of the received theory and some prior empirical work that has explored formal demographic-economic interactions will be provided. The model is presented next and then the results focus on graphical presentation of the results of two scenarios, one in which no aging process is assumed and the other in which the expected pattern of aging is modeled. The analysis is centered on a two-region model of the Chicago economy (Chicago and the Rest of the US) although the results ignore the influence of migration.
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REAL 07-T-3
An Integrated Framework of the Market Areas and Supply Areas:
Combining Market-Area Systems with Supply-Area Systems
Daisuke Nakamura
Abstract: There is a potential theoretical problem in the established framework of market-area and supply-area analysis when both approaches are investigated in an integrated framework with respect to firm location. It is argued that the mechanism of the problem is illustrated by insufficient inclusions of the notion of internal and external economies. The alternative model formulates the spatial duality theory, which enables us to internalize these economic elements into the existing theoretical framework. The impact of the additional elements is summarized by comparative-static methods, examining the spatial equilibrium of market-area and supply-area competitions.
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REAL 07-T-2
The Impact of Industrial Specialization or Diversity on Employment
and Wage Growth: An Analysis of the Brazilian Case in the 1990s
Silvia Harumi Toyoshima and Geoffrey J.D. Hewings
Abstract: The objective of this paper was to verify if the specialization in a given industrial sector generated positive externalities in the Brazilian microregions. Analysis explored whether specialization had a greater impact on employment and wage variation in the microregions than industrial diversity, during the 1990s, when the focus upon specialized agglomerations was reinforced as the way to promote local economic development. The method utilized was adapted from the Glaeser et al. model, an externalities generation model applied to the USA case. The results showed that changes that occurred in the Brazilian industrial sector in the 1990s influenced the impact of specialization and diversity on employment and wages, and that there are many differences across the regions of the country. On the whole, the outcome showed that the specialized microregion was important to foster employment in a region where the clusters were consolidated. In a region where the clusters formation was initiated in the 1990s, the tendency was to decrease the employment and increase the wages, indicating a process of productivity augmentation. The implication is that mature industrial concentrations can foster growth more than other locations at least in Brazilian case, confirming the principal hypothesis about the presence of increasing returns in specialized locations.
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REAL 07-T-1
Industrial Clusters in the Input-Output Economic System
Michael Sonis, Geoffrey J.D. Hewings and Dong Guo
Abstract: The topological principles of the well-known Atkin Q-analysis are applied to the identification of clusters of industries using input-output systems. The operational methodology of Q-analysis is presented in detail and supported by empirical application to the analysis of the Chicago economy in 2000. The central point of the paper is the interpretation of the structural chains of highest dimension as the most significant input-output industrial clusters. This new methodology provides a new way for visualizing economic complexity through the process of structural economic complication.
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REAL 06-T-13
The European Regional Growth Process Revisited: Increasing Returns
and Spatial Dynamic Setting
Sandy Dall'erba, Marco Percoco and Gianfranco Piras
Abstract: Most of the recent contributions based on spatial econometrics which measure convergence among regions rely on a cross-sectional estimation of the Solow’s (1956) model. However, this type of approach presents two main drawbacks. The first one is the lack of consideration for increasing returns to scale, which are at the origin of endogenous growth and new economic geography models. The second one is that it does not consider explicitly the role of space on the development process. In that purpose, we find more appropriate to use Fingleton’s (2001) model which links manufacturing labor productivity growth to manufacturing output growth and technology gap. We extend this specification to the case of 244 European regions over 1991-2003. In addition, we develop a spatial method to endogenously detect and include the presence of spatial heterogeneity in our sample. The conclusions give new insights for policy-makers interested in convergence and regional policies developed to promote it.
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REAL 06-T-12
The Diffusion of New Technology: Adoption Subsidies, Spillovers,
and Transaction Costs
Chokri Dridi and Naceur Khraief
Abstract: We establish the relation between optimal subsidy
rates and spillovers from the sequential adoption of a new technology; we
find that they evolve in the same direction over time. We show that spillovers,
hence the subsidy rates, need not be monotonic. We shoe that when subsidy
rates are increasing, their growth rate has to be paced by the growth rate
of the present cost of the adoption of the new technology. We also show that
increasing subsidies rates cannot produce the desired effect of accelerating
adoption if the social cost of public finds is relatively high; hence first-best
subsidy adoptions are not always possible.
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REAL 06-T-11
Spatial Hierarchical Analysis of Italian Regions
Paolo Postiglione and Geoffrey J. D. Hewings
Abstract: Regional interactions and spillover effects should
be considered as important factors in growth analyses of regional economies.
In this paper, using a modified version of the Dendrinos-Sonis model (1990),
we analyze the spatial hierarchical system of Italy. The interaction among
Italian regions is considered at three different levels of spatial aggregation
based on the NUTS classifications. The results from the model strongly depend
on the choice of the region considered as the numeraire. In this paper,
we define some general rules to help economic researchers in the choice of
the reference region.
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REAL 06-T-10
Measuring agglomeration: an exploratory spatial analysis approach
applied to the case of Paris and its surroundings
Rachel Guillain and Julie Le Gallo
Abstract: This paper suggests a methodology allowing the
measurement of the degree of spatial agglomeration and the identification
of location patterns of economic sectors. We develop an approach combining
the locational Gini index with the tools of Exploratory Spatial Data Analysis.
Applying this methodology on Paris and its surroundings for 26 manufacturing
and services sectors in 1999, we find that the Gini coefficient and the global
Moran’s I provide different but complementary information about
the spatial agglomeration of the sectors considered. Moran scatterplots and
LISA statistics reveal a high level of diversity in location patterns across
sectors.
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REAL 06-T-9
Political Economy and Irrigation Technology Adoption Implications
of Water Pricing under Asymmetric Information
Chokri Dridi and Madhu Khanna
Abstract: We analyze the design of two water pricing rules
emerging from two alternative farmer lobby groups, formed by the adopters
and the non-adopters of modern irrigation technology. We examine the implications
of these rules for the endogenously determined lobby size, for irrigation
technology adoption, water use and social welfare. Two pricing rules are
considered here: (i) two-part tariff, with a volumetric part and a fixed
part and (ii) nonlinear pricing, with the price of water varying with volume,
each designed to meet the budgetary costs of water provision. Under each
of these rules, we find that the group in majority prefers a fee designed
to shift the burden of the cost of water provision on the other group. The
characteristics of the resulting fee structure and its welfare implications
are further explored through a numerical illustration.
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REAL 06-T-8
Determinants of Interregional Migration in Italy: 1991-2000
Roberto Basile and Marco Causi
Abstract: After the reduction of public transfers to the
South of Italy that occurred during the early 1990s, Southern residents experienced
a decrease in their permanent income. During the same period, the devaluation
of the lira in 1992 allowed the highly specialized industrial areas in the
North-East-Centre to dominate the expansion of economic activity that culminated
in 2000. These two events contributed to determine a rise in interregional
migration flows in the second half of the 1990s, especially from the South
to the North. In light of this evidence, this study examines the effect
of traditional determinants of net migration rates in Italian provinces during
the period 1991-1995 (when the migration flows still followed a slowing path)
and the period 1996-2000 (characterized by an increase in interregional migration
flows). The estimation results of a SUR model suggest that during the first
period the net migration rates were weakly or not significantly affected
by traditional economic variables such as the unemployment rate, level of
disposable income and a province’s industrial base. In the period 1996-2000,
the migration behavior seems to have responded more faithfully to the traditional
signals, as shown by higher and statistically significant coefficients of
economic variables in the equation for the second period. For both periods
a significant role of the age structure of the population was found.
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REAL 06-T-7
Impacts of Demographic Changes in the Chicago Region
Sang Gyoo Yoon and Geoffrey J.D. Hewings
Abstract: Most CGE models and many econometric models pay
little attention to the demographic-economic interactions in the economy,
with the notable exception, of course, of labor market behavior. However,
with many national and regional economies experiencing significant demographic
changes – ageing of the population, differential (in terms of income and
occupational characteristics) out- and in-migration and deepened income disparities,
there is a need to consider ways in which some of these demographically-induced
changes can be handled. Using Chicago data, this paper explores some implications
of demographic changes – especially ageing of population and income distribution
- on consumption behavior in the Chicago region using an extended Chicago
Region Econometric Input-Output Model (CREIM), where a modified Almost Ideal
Demand System (AIDS) is integrated.
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REAL 06-T-6
Modelling Production Externalities in the Maquila Industry
Becky Zerlentes, Geoffrey J.D. Hewings, and Stephan Weiler
Abstract: In the past decade, the maquiladora export industry
surpassed both tourism and petroleum products to become the number one source
of earned foreign exchange for Mexico . The continued growth and spatial
concentration of the maquila industry suggest that there may be significant
production spillovers into the local environments. Dynamic modeling, using
STELLA, provides a framework for considering the maquila industry
from a joint economic and environmental perspective, underscoring the importance
of understanding linkages between economic growth and environmental impacts
when considering infrastructural planning, linkages that have not been featured
in research on this region. An economic-ecologic model is developed for
two urban communities, Nogales and Mexicali . In the former case, the analysis
revealed the inadequacy of the capacity planning for the treatment of effluent;
in the latter case, conservative projections reveal that the system upgrades
should be able to handle demands through 2020.
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REAL 06-T-5
Retirement Exodus and Its Impacts on Regional Economies: Simulation
Results from the Chicago CGE Model
Seryoung Park
Abstract: This paper analyzes the impact of large retirement
out-migration (a so called retirement exodus), which is expected to accelerate
with the rapid transition to an ageing population over the next two decades.
Specifically, this study quantifies the effect of retirement migration and
ageing population on both a regional and the national economy in terms of
its impact on consumption patterns by age cohort, labor market, and industry
structure. For this purpose, this paper uses a two-region Computable General
Equilibrium (CGE) model, combined with an Overlapping Generation (OLG) framework,
where all the economic interactions arising from demographic changes can
be captured. In addition to the macroeconomic consequences of demographic
changes, this study will also assess the likely impacts of changes in policy,
such as the pension fund liabilities, and favorable foreign immigration policy.
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REAL 06-T-4
Wages Differentials and Interregional Migration in the U.S.
: an Empirical Test of the “Option Value of Waiting” Theory
Roberto Basile and Jaewon Lim
Abstract: The ‘option value of waiting’ theory applied
to interregional migration predicts that a potential migrant actually moves
only when the wage differential between origin and destination places exceeds
a certain threshold, which might be much higher than the Marshallian trigger.
In this paper we exploit the panel structure of a dataset on interregional
migration among nineteen MSAs in the US from 1993 to 2001 to estimate a modified
dynamic gravity model of migration. In particular, using both semi-parametric
and GMM estimators (taking into account possible endogeneity of the explanatory
variables), we find robust evidence of a non-linear relation between migration
and wage differentials. With a wage differential smaller than a certain
threshold, people rarely move controlling for the other socioeconomic variables.
Only beyond the threshold, the interregional migration grows rapidly proving
an important role of the option value of waiting in migration decision process.
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REAL 06-T-3
Spatial Interdependence in a Metropolitan Setting
Geoffrey J.D. Hewings and John B. Parr
Abstract: Consideration is given to the spatial structure
of the metropolitan area, and to the tendency for this to be generalized
in terms of the stark dichotomy of city and suburbs. Focusing on a four-zone
metropolitan area, a model of spatial interaction is outlined, the components
of which are based on intersectoral trade, labor mobility, and consumption-expenditure
patterns. These components are drawn together as layers in an organized
sequence of processes. The linked components are shown to give rise to intricate
patterns of spatial interdependence. These have the effect of blurring the
city-suburbs distinction, and are fundamentally different from comparable
patterns at other spatial scales.
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REAL 06-T-2
Comparing Matrix Adjustment Methods: A Formal Approach
Louis de Mesnard
Abstract: Matrix adjustment methods are very useful in
regional economics to project or update matrices. The principle consists
of finding the matrix that is the closest to an initial matrix subject to
column and row sum totals of a target matrix. Many authors have tried to
determine which matrix-adjustment method is the best from an empirical point-of-view
using real data. In order to address the question from a theoretical point-of-view,
the article examines the simpler problem of vector adjustment and then returns
consideration of matrices. The information-lost minimization (biproportional
methods and RAS) leads to a multiplicative form and generalizes the linear
model. On the other hand, the distance minimization that leads to an additive
form tends to distort the data by giving a result asymptotically independent
of the initial matrix. As a result, it is possible to conclude unambiguously
that biproportional methods and RAS are the best for matrix adjustment because
they generalize the linear model and are asymptotically the most respectful
of the initial matrix while they do not generate surprising negative terms.
Moreover, measuring the gap between the projection and the target to determine
which method is the best is not a good idea because the gap depends on the
data; on the contrary, the gap can be interpreted in terms of a structural
effect that is a general form of the shift-share method.
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REAL 06-T-1
Impact of Reallocation of Resource Constraints on the Northeast
Economy of Brazil
Geoffrey J.D. Hewings, Chokri Dridi, and Joaquim Guilhoto
Abstract: The present paper explores the role of water
and energy resource constraints and allocation on the Northeast Brazil economy.
The analysis centered on the creation of an intergrated model in which an
econometric-input-output model was linked with a linear programming optimization
model for resource allocation. Over the period 1999-2012, the impact on
the six agricultural sectors was to reduce their output and employment by
15% annually. The reduction in employment in the rest of the economy was
a little over 1% annually. However, since the agricultural sectors continue
to employ a significant percentage of the labor force, the aggregate loss
of employment amounted to 6% of the total regional employment on average,
translating into 1 million jobs annually. When water allocation and energy
resource allocations are considered simultaneously, the re-allocations are
more limited, resulting in a loss of 0.78 million jobs annually. These results
suggest the need for an active link between policy making and economic development
when resource constraints are present. Some balance has to be provided between
allocation and reallocation on the one hand perhaps driven by concerns with
economic efficiency against anticipated losses of employment for part of
the labor force with few other alternatives.
[Download]
REAL 05-T-11
Analyzing Intra-Distribution Dynamics: A Reappriasal
Giuseppe Arbia, Roberto Basile and Gianfranco Piras
Abstract: In this paper we suggest an alternative estimator
and an alternative graphical analysis, both developed by Hyndman et al. (1996),
to describe the law of motion of cross-sectional distributions of per-capita
income and its components in Europe. This estimator has better properties
than the kernel density estimator generally used in the literature on intra-distribution
dynamics (cf. Quah, 1997). By using the new estimator, we obtain evidence
of a very strong persistent behavior of the regions considered in the study,
that is poor regions tend to remain poorer and rich regions tend to remain
richer. These results are also in line with the most recent literature available
on the distribution dynamic approach to regional convergence (Pittau and
Zelli, 2006).
[Download]
REAL 05-T-10
Growth, Technological Interdependence and Externalities: Theory
and Evidence
Cem Ertur and Wilfried Koch
Abstract: This paper presents a theoretical model, based
on the neoclassical growth literature, which explicitly takes into account
technological interdependence among economies and examines the impact of
location and neighborhood effects in explaining growth. Technological interdependence
is supposed working through spatial externalities. The magnitude of the physical
capital externalities at steady state, which is usually not identified in
the literature, is estimated using a spatial econometric specification explaining
the steady state income level. This spatially augmented Solow model yields
a conditional convergence equation which is characterized by parameter heterogeneity.
A locally linear spatial autoregressive specification is then estimated.
[Download]
REAL 05-T-9
Regional Input-Output with Endogenous Internal and External
Network Flows
John R. Roy and Geoffrey J.D. Hewings
Abstract: A major characteristic of dynamic regions or
sets of dynamic regions is that external exports and imports are very significant
in comparison with internally generated flows. Yet, it is precisely these
flows of external exports and imports that are not evaluated in conventional
regional input-output (I-O) analysis. The conventional approach merely determines
internal flows of intermediate inputs. However, the total observable flows
also contain internally generated flows to final demand, as well as external
export flows, and external import flows to supply both intermediate inputs
and final demand, implying five component flows. In most past models, the
latter sets of flows have not been identified, with merely their totals at
each region being assumed known. Although in recent work by the first author,
internally generated regional flows to final demand were determined, certain
of the regional external import and export flows were assumed to be available
exogenously. This is quite an unrealistic expectation. In the following,
all five sets of component flows are jointly determined, including transhipments
of external exports and imports. In addition, rather than assuming just a
single path between each set of regions, feasible multiple paths are assumed.
A link/path transformation can then be made to obtain total link flows for
each category, allowing a future consideration of congestion.
[Download]
REAL 05-T-8
The Sensitivity of Multiregional Economic Structure to Improved
Interregional Accessibility
Norihiko Yamano and Kazumi Hitomi
Abstract: Our recently developed Japanese Multi-Regional
Econometric Input-output Model is an extended interregional econometric IO
model. The interregional economic transactions by sectors are endogenously
determined from the conditions of economic situation and trade barriers.
In Japan, a society with a decreasing population, further investment in the
transportation infrastructure has become a pressing issue. Employing the
trade endogenized framework, the exogenous changes in the transportation
network can be taken into account in our model. The numerical analysis of
improved accessibility provides the economic impacts on regional economies
as well as disparities. The result of sensitivity analysis shows that the
improved accessibility induces the convergence of per capita labor productivity.
The expansion of infrastructure has tremendous effects in the periphery regions
at the initial stage, but the positive effects fade with time, and the geographical
advantage of the regions located in the central part of Japan become even
stronger than the base case at the later phase of the simulation.
[Download]
REAL 05-T-7
Does the Trade Balance Really Matters for Regions?
Pedro Nogueira Ramos
Abstract: This paper explores the reasons why regional
economics does not focus on the regional balance of payments. The main focus
will be to gauge the importance of external imbalances in regional economies,
with that concept being confined to the trade (goods and services) account.
Discussion centers on why regions can run wider trade deficits than nations
and it is argued that they may even benefit regional economies. Notwithstanding
the limited data available, empirical evidence for EU regions is put forward
to supporting the idea that regions meet more frequently trade imbalances
of relevant size than those faced by countries.
[Download]
REAL 05-T-6
Using Average Propagation Lengths to Identify Production Chains
in the Andalusian Economy
Erik Dietzenbacher, Isidoro Romero and Niels S. Bosma
Abstract: In this paper, we adopt the viewpoint that not
only the size of sectoral linkages is relevant but also the economic distance
between sectors. To measure distance, we define the average propagation length
as the average number of steps it takes an exogenous change in one sector
to affect the value of production in another sector. This distance does not
depend on whether the linkages are forward or backward in nature. Combining
the size of the linkages and the distance between sectors, allows us to visualize
the production structure in terms of production chains. The empirical application
studies the Andalusian economy.
[Download]
REAL 05-T-5
Identifying the Structural Changes of China’s Spatial Production
Linkages Using a Qualitative Input-Output Analysis
Shiro Hioki,G.J.D.Hewings and Nobuhiro Okamoto
Abstract: In this paper, we try to identify the structural
changes in China’s interregional input-output linkages over the period 1987-1997
using the Minimum Flow Analysis introduced by Schnabl (1994, 2001). The MFA
clearly reveals that some major changes in the structure of China’s interregional
linkages took place along with increasing self-sufficiency of many regions.
Although many interregional linkages between manufacturing industries within
coastal areas have decreased their relative importance, some new linkages
with other industries and with other regions have gradually become more important
over the same time period, leading us to conclude that China is now reorganizing
the structure of economic interdependencies between its spatial units.
[Download]
REAL 05-T-4
Social Capital in a Social Network Framework: An Analysis of Social
Spaces in Region of Tarapaca ( Chile )
Marcelo L. Lufin
Abstract: This paper uses Social Capital analysis, including
Social Networks tools, to evaluate the participation levels in social organization
as a context for social interactions. The social area under study includes
10 municipalities located in Region of Tarapaca in Chile , a region that
presents some interesting cultural features that are expected to affect the
levels of participation and the way in which the social connections are structured.
A social capital framework including a network dimension was adopted, following
a Position Generator spirit. The analytical network tool was used to describe
the patterns of social interaction and to identify descriptive associated
factors. The results revealed important differences between communities
and some influence of potentially contact resources on the interactions patterns
exhibited in each location. In terms of Social Organizations
the evidence suggests that the structures of linkage between different organizations
are similar in terms of density in any community, emerging a Core composed
by 4 types of organizations. The patterns of participation are presenting
some particularities in terms of people characteristics by ethnicity, gender
and class. In the case of household by household matrix analysis, the correlational
evidence is suggesting that the variable Sex is presenting a strong connection
with the participation in social organization, similar results is found to
some factors of social capital defined as “Household Assimilation” and “Labor
Participation”. Finally A second result suggests some differentiate effect
between urban and rural communities, especially in terms of the Social Capital
factors related with “Return of Human Capital” and “Household Assimilation”.
[Download]
REAL 05-T-3
Convergence in per-capita GDP across EU-NUTS2 regions using panel
data models extended to spatial autocorrelation effects
Giuseppe Arbia and Gianfranco Piras
Abstract: This paper studies the long-run convergence of
per-capita GDP across European regions. Most of the empirical works in this
area are based on either cross-sectional or a-spatial panel data fixed-effects
estimates. Here, we propose the use of panel data econometrics models that
incorporate an explicit consideration of spatial dependence effects (Anselin,
1988; Elhorst, 2001; 2003). This allows us to extend the traditional convergence
models to include a rigorous treatment of the regional spillovers and to
obtain more reliable estimates of the parameters. Two models are considered
in particular based on the introduction of a spatial lag among the esplicatives
("spatial lag model") and imposing a spatial autoregressive structure
to the stochastic component ("spatial error model"). We apply such
a modelling framework to the long-run convergence of per-capita GDP of 125
EU-NUTS2 regions observed yearly in the period 1977-2002. The paper also
provides a comparative study between the results obtained with the two proposed
models and those obtained on the same set of data with the standard b-regression,
with the standard b-regression augmented with a spatial component,
and with the standard fixed-effect panel data model.
[Download]
REAL 05-T-2
Spatial Heterogeneity and Interregional Spillovers in EU: Some
Evidence about the Effects of Cohesion Policies on Convergence
Julián Ramaj, Miguel A. Márquez, Geoffrey J.D. Hewings and Maria
M. Salinas
Abstract: In this work, using a spatial econometric perspective,
the speed of convergence for a sample of 163 regions of the European Union
over the period 1981-1996 is estimated. For this purpose, we use a specification
strategy which allows an explicit modeling of both spatial heterogeneity
and spatial autocorrelation found in the analyzed sample. The estimated final
model combines groupwise-heterocedasticity, the identification of two regimes
(Cohesion and non-Cohesion countries) and spatial dependence. Our results
show how an appropriate treatment, simultaneously, of the problems derived
from spatial structural instability and substantive spatial dependence can
shed new insights into the European convergence process. One of the main
findings of the paper is that the analysis opens a path to discern the ex-post
general effects of European Union regional policies as a whole on the regional
convergence process in terms of the Cohesion/Non Cohesion country dichotomy.
Our estimations indicate that over the analyzed period there was a faster
convergence in relative income levels of the regions belonging to Cohesion
countries (5.3 per cent) than in the rest of the regions of the European
Union (3.3 per cent). Therefore, our results contrast with other evidence
that points to the fact that the convergence process in Europe stopped at
the beginning of the 1980s.
[Download]
REAL 05-T-1
Dynamics Effects within a Regional System: An Empirical Approach
Miguel A. Márquez, Julián Ramaj and Geoffrey J.D. Hewings
Abstract: This paper focuses on the dynamic effects under
which the regional economic growth processes are accomplished, breaking them
down into two broad types: neighborhood and economy-wide effects. By means
of a proposed dynamic space-time empirical model, the competition structure
within a multi-regional economic system is developed. Co-integration/error
correction modeling techniques are used to support the existence of this
competition structure over both the short- and long-term. As an application,
we show the dynamic effects on the evolution of the regional performance
of Spanish regions over the period 1972-2000. Our results indicate that
some macroeconomic forces are operating through time into this Spanish system
since positive and negative effects are detected at both economy-wide and
neighborhood levels. Further, the findings show that a new taxonomy of the
Spanish regions could provide some guidance for the development of appropriate
measures for regional economic policy.
[Download]
REAL 04-T-20
Spatial and Sectoral Productivity Convergence between European
Regions, 1975-2000
Julie Le Gallo and Sandy Dall'erba
Abstract: This paper analyzes the evolution of labor productivity
disparities among 145 European regions over 1975-2000 according to the concepts
of s- and b-convergence and emphasizes the importance of
including both spatial effects and a disaggregated analysis at a sectoral
level. We detect s-convergence in aggregate labor productivity
and in the service sectors but not in the other sectors. This result can
be explained by a transfer of resources from the agricultural sector to the
more productive sectors that has been more marked in the poor regions. Empirical
results also indicate that the common indicator of s-convergence
lead to a bias when spatial effects are not included in the analysis. We
then estimate b-convergence models including the relevant spatial
effects for each sector. The results show that inequality in productivity
levels between core and peripheral regions persist and highlight how convergence
speeds and the nature of spatial effects vary from one sector to another.
[Download]
REAL 04-T-19
Structure of Interregional Trade and Migration Flows in Spain:
Analogy or Disparity?
Sandy Dall'erba and Dong Guo
Abstract: The purpose of this paper is to perform an exploratory
investigation of the similarity between the economic structure of interregional
trade and migration flows within Spain for the years 1998 and 1999. Both
variables act upon regional economic growth, but their flows rely on different
driving forces. We apply SONIS’ ,1980, extreme tendency decomposition to
the flow matrices. The results reveal that half of the most important trade
and migration flows have the same origin and destination regions and take
place mostly between neighbors. This may be due to increasing transportation
and non-pecuniary costs with distance. The same conclusions hold for flow
growth.
[Download]
REAL 04-T-18
The Impact of E.U. Regional Support on Growth and Employment
Sandy Dall'erba and Julie Le Gallo
Abstract: In this paper we assess the impact of structural
funds on the per capita GDP and employment convergence process of 145 European
regions over 1989-1999. This paper goes beyond the recent contributions
on European regional policies and convergence since each of the five objectives
of regional support is studied and spatial effects are included in the analysis.
For this purpose we use spatial econometrics to include the relevant spatial
effects in the estimation of the appropriate conditional b-convergence
model. The impact of the funds and their spatial lags indicate few significant
results, and when they are, their extent is very small or even negative.
This raises some doubts on the efficiency of regional support and call for
a deep reform for the next programming period.
[Download]
REAL 04-T-17
Space-Time Lags: Specification Strategy in Spatial Regression Models
F.A. López and C. Chasco
Abstract: The purpose of this article is to analyze the
dynamic trend of spatial dependence, which is not only contemporary but time-lagged
in many socio-economic phenomena. Firstly, we show some of the commonly used
exploratory spatial data analysis (ESDA) techniques and we propose other
new ones, the exploratory space-time data analysis (ESTDA) that evaluates
the instantaneity of spatial dependence. We also propose the space-time correlogram
as an instrument for a better specification of spatial lag models, which
should include both kind of spatial dependence. Some applications with economic
data for Spanish provinces shed some light upon these issues.
[Download]
REAL 04-T-16
The Effects of the Brewery Industry on the Evolution of the Metal
Can Industry
Moshe Yanai
Abstract: Positive interactions in business have received
little attention in recent years. I propose a set of definitions and research
tools for analyzing these types of interactions among organizations. These
proposed tools are applied in a study of the interaction between the metal
can and large breweries industries. Although the proposed set of propositions
was not supported by the data, there is some evidence that positive interactions
do play a role in determining the fate of organizations. Future research
is needed for better understanding and generalization of the conditions in
which positive interactions are more likely to occur, and the consequences
of positive interactions for organizations.
[Download]
REAL 04-T-15
DISCOSEM: An Integrated Epidemiological-Economic Analysis of Foot
and Mouth Disease in the Southern Cone
Karl M. Rich
Abstract: Animal disease outbreaks present significant
costs to affected countries, particularly those that are export-oriented,
which have impacts over time and space. However, there has been little work
to combine realistic epidemiological models with sophisticated economic analysis
that incorporates dynamic and spatial aspects. This paper develops an integrated
dynamic and spatial epidemiological-economic model of animal disease control
(DISease COntrol Spatial Epidemiological-economic Model, DISCOSEM). The model
is applied to analyze twelve alternative foot and mouth disease control strategies
in the Southern Cone, based on an initial outbreak in Paraguay. Model results
indicate that policies that combine vaccination in Paraguay and stamping
out elsewhere have the highest benefits, given that such a combined policy
leads to slightly shorter outbreaks and was less costly than pure stamping
out. Prophylactic, preventative vaccination by nearby regions (i.e., vaccinating
upon discovery of the disease in Paraguay) is the most effective strategy
from an epidemiological standpoint and the best short-term policy, but resulted
in reduced benefits over time, given the disruption vaccination policies
have on accessing export markets.
[Download]
REAL 04-T-14
A COMPUTABLE GENERAL EQUILIBRIUM MODEL TO ANALYZE DISTRIBUTIVE
ASPECTS IN BRAZIL WITH A TRADE POLICY ILLUSTRATION
Samir Cury, Allexandro Mori Coelho and Carlos Henrique Corseuil
Abstract: This paper has been developed using a CGE modeling
strategy for simulations of Brazilian trade policies that allows the analysis
of income distribution impacts of macro shocks with complex and systemic
propagation methods. In order to capture the distributive impacts, the model
adopts a specific design focused on the separation of production and institutional
factors, such as labor and households. The model is divided into three blocks:
product market, factor market (essentially labor), and one block that handles
income transfers among institutions. The labor market block incorporates
a recent theoretical advance that allows the determination of involuntary
unemployment in the equilibrium. The third block includes information on
the distribution of the value added in the productive process among production
factors, as well as its redistribution among agents/institutions considered
in the model. The simulations of a partial “closure” of the economy show
a modest welfare reduction for most workers and their families. Also in this
paper, we checked the homogeneity property of CGE Models and concluded that
it can hold only with full indexation of all income transfers, which has
important implications for the income distribution process.
[Download]
REAL 04-T-13
STRUCTURAL CHANGE DECOMPOSITION THROUGH GLOBAL SENSITIVITY ANALYSIS
OF INPUT-OUTPUT MODELS
Marco Percoco, Geoffrey J. D. Hewings and Lanfranco Senn
Abstract: Sensitivity analysis has become an important
tool to test the robustness of estimated economic models. In this paper we
propose the use of simulation-based sensitivity analysis to identify the
fundamental structure of the economy. To show the possibilities of this technique,
we provide empirical evidence on the path of structural change occurring
in the Chicago economy by running simulation in projected input-output tables
over the period 1975-2010.
[Download]
REAL 04-T-12
TYPOLOGY OF STRUCTURAL CHANGE IN A REGIONAL ECONOMY: A TEMPORAL
INVERSE ANALYSIS
Yasuhide Okuyama, Michael Sonis And Geoffrey J. D. Hewings
Abstract: Earlier studies (Hewings et al., 1998, Okuyama
et al., 2002a, and Okuyama et al. 2002b) investigated the hollowing-out phenomenon
of the Chicago economy, in which the manufacturing sectors in Chicago have
decreased their intermediate dependency within the region while the service
sectors have increased their dependency. In this paper, a set of annual input-output
tables for the Chicago metropolitan economy during the period of 1980-97
was again employed for a further investigation of the structural change,
using an alternative tool, the Temporal Leontief Inverse Analysis (Sonis
and Hewings, 1998), which can assist in exploring trends and uncovering tendencies
in individual sectors or groups of sectors within the context of an economy-wide
system of accounts. The results are compared with the earlier studies for
examining the nature and details of the hollowing-out phenomenon.
[Download]
REAL 04-T-11
STRUCTURAL CHANGES IN THE INDONESIAN ECONOMY: A NETWORK COMPLICATION
APPROACH
Nuzul Achjar, Michael Sonis and Geoffrey J.D. Hewings
Abstract: Using a time series of social accounting matrices
(SAMs) for Indonesia, an exploratory analysis is conducted to explore some
of the more important structural changes in that nation’s economy. By adopting
a block structural path analysis, attention was directed to the network complication
engendered by gradually exploring links between one subsystem in the SAMs
and the remaining systems. Important changes in the structure of production
were revealed but the dominant changes appeared to lie in the distribution
of income between factors, especially the growing importance of labor income
and the concomitant change in consumption as incomes have risen. The effects
of the 1997 financial crisis was discernible but the long-term implications
remain to be explored.
[Download]
REAL 04-T-10
VERTICAL CONNECTIONS IN THE MIDWEST ECONOMIES: THE ROLE OF INTERNAL
AND EXTERNAL TRADE
John J.Y. Seo, Geoffrey J. D. Hewings and Michael Sonis
Abstract: An earlier paper (Hewings et al., 1998), evidence
suggested that the Chicago metropolitan region was hollowing out, namely
becoming less dependent on internal-to-the-region sources of inputs and sales
of products and services. The findings raised the question about where this
spatial dependence had relocated and the current paper explores the process
of structural interdependence for the Midwest economy using a REIM (Regional
Econometric Input/Output Model). The model examines the Midwest, the constituent
states of Wisconsin, Illinois, Indiana, Ohio and Michigan, and the Rest of
the US in a six-region formulation. Based on the flow matrix from the model,
a feedback loop analysis is first conducted to identify the spatial geographic
structure of trade flows. This study further examines industrial interdependencies
in a sequential production process, by applying Maddigan’s vertical connection
index to the multi-region framework with a particular focus on the role of
interregional and inter-activity trades.
[Download]
REAL 04-T-9
THE INTERREGIONAL IMPACT OF INTERNATIONAL EXPORTS ON THE MIDWEST
ECONOMIES
John J.Y. Seo and Geoffrey J. D. Hewings
Abstract: While US export shares of total production remain
small, little is known about the potential differential effect that international
exports have on regional (state) economies. This paper presents the percentage
of each state's output that is dependent both directly and indirectly on
international commodity exports from the Midwest. Based on a Midwest Regional
Input/Output Econometric Model, it explores the intra- and inter-regional
economic linkage among six regions of five Midwest states and the rest of
US region. The linkage is analyzed for 13 sectors but focuses exclusively
on the impacts generated by exports from the merchandise sectors. The indirect
export share is further decomposed into three sources: self-reinforcing,
Midwest regional spillover, and non-Midwest spillover.
[Download]
REAL 04-T-8
A MODEL OF HOUSING PRIVATIZATION DECISION: THE CASE OF RUSSIA
Maria Plotnikova
Abstract: This study addresses the issue of housing privatization
in Russia in the course of the1990s. Privatization was started as a first
step for creation of housing market in order to efficiently allocate resources
in the use and production of housing, as well as to phase out the state budget
financing of housing. Unlike the other post-socialist countries where housing
was sold to the residents at discount prices, in Russia dwellings were offered
to their residents free of payment. The objective of this study is to offer
a better understanding of the structural components of privatization by formally
modeling housing privatization decision from the household point of view.
The model is based on a trade-off between certain value of renting and uncertain
value of owning. Using the results of the theoretical model, an empirical
model of the privatization decision from the point of view of the household
is formulated. The findings of the empirical model are that household characteristics
such as education and age affect privatization decision but income does not.
Higher quality dwellings are more likely to be privatized. There are also
locational effects indicating that place-specific factors such as amenities,
municipal policies affect privatization decision. This research has important
policy implications with respect to housing policies in Russia, and future
housing privatization efforts in other countries.
[Download]
REAL 04-T-7
REGIONAL DISPARITIES IN THE EUROPEAN UNION AND THE ENLARGEMENT
PROCESS: AN EXPLORATORY SPATIAL DATA ANALYSIS, 1995-2000
Cem Ertur and Wilfried Koch
Abstract: The aim of this paper is to study the space-time
dynamics of European regional per capita GDP in the perspective of the enlargement
of the European Union. We find strong evidence of global and local spatial
autocorrelation as well as spatial heterogeneity in the distribution of regional
per capita GDP in a sample of 258 European regions including regions from
acceding and candidate European countries over the period 1995-2000. However,
contrary to previous results obtained in the literature highlighting a North-South
polarization scheme, the enlargement process leads to a new North-West –
East polarization scheme. The economic dynamism of EU15 regions and acceding
or candidate regions is also investigated by exploring the spatial pattern
of regional growth. Implications for regional development and cohesion policies
are finally explored.
[Download]
REAL 04-T-6
THE TRANSPORT-REGIONAL EQUITY ISSUE REVISITED
Eduardo Simões de Almeida, Eduardo Amaral Haddad and Geoffrey J.D.
Hewings
Abstract: The objective of this paper is to analyze the
relationship between transport and regional equity in Minas Gerais (Brazil).
Furthermore, the existence of a trade-off between economic performance and
regional equity is investigated as well. To do so, we develop a spatial computable
general equilibrium model based on Bröcker’s approach to implement comparative
static analysis, explicitly incorporating iceberg transportation costs. Four
activities are modeled, namely, production, final demand, transportation
and exports. Two production factors are assumed: labor and other factors.
In the model, there are twelve domestic regions and three external regions.
We develop four counterfactual experiments based on decreases in transportation
costs due to a “distance shortening.” The main findings indicate that if
the transport infrastructure improvement is focused only among poor regions,
the promotion of the regional equity is insignificant. If the transport infrastructure
improvement links are concentrated among rich regions, there is an increase
in regional income inequalities. However, if the improvements are targeted
to the roads linking poor regions and rich ones, there is promotion of regional
equity. The same result will occur when improvements are made to all road
links of the state.
[Download]
REAL 04-T-5
THE COST OF A STRUCTURAL CHANGE: A LARGE AUTOMOBILE PLANT IN A
BRAZILIAN LESS DEVELOPED REGION
Luiz Ricardo Cavalcante and Simone Uderman
Abstract: The aim of this paper is to evaluate the costs
and benefits associated with the establishment of a large automobile plant
in the Brazilian state of Bahia, located in one of the poorest macro-regions
of the country. It is argued that behind Ford’s decision to establish a plant
far from the economic center of the country are not only the large incentives
package offered at the Federal and State levels, but also the 1999 Southern
Common Market (Mercosur) crisis, and the global strategies of the company.
The incentive package given to Ford at the state level is estimated in about
R$ 2.642 billion, or 75% of the total investment. Although high in absolute
terms, when the total incentives are divided by the investment, they seem
to be similar to the incentives given by other Brazilian states to automobile
assemblers in the 1990s. It is shown that the largest part of the incentives
is due to tax breaks, which represent more than three quarters of their total
value. Despite the large absolute number of jobs created by the assembler
and first tier suppliers, it is argued that the main benefit associated with
the project is a likely (but uncertain) structural change in the state economy,
as a result of the backward and forward linkages to be created. The strength
of these linkages, however, depend upon the success of the project itself,
and the state government, actually, has little control over this issue.
[Download]
REAL 04-T-4
SENSITIVITY ANALYSIS IN APPLIED GENERAL EQUILIBRIUM MODELS: AN
EMPIRICAL ASSESSMENT FOR MERCOSUR FREE TRADE AREAS AGREEMENTS
Edson P. Domingues, Eduardo A. Haddad and Geoffrey J.D. Hewings
Abstract: In this paper, an applied general equilibrium
(AGE) model is used to assess the welfare results of alternative free trade
areas (FTA) for three MERCOSUR countries, Brazil, Argentina and Uruguay.
The results of the sensitivity to shocks and parameters are evaluated. In
such a way, the robustness of the results to different degrees of intra-blocs
trade liberalization and trade elasticities will be assessed. It is shown
that welfare gains for Brazil are very robust to different degrees of trade
liberalization, and allocation effects drive these gains. For Argentina and
Uruguay, welfare gains depend heavily on a higher degree of liberalization,
as they are connected to terms of trade effects. This paper shows that trade
elasticities are important parameters driving the model’s results, as welfare
gains for Argentina and Uruguay in both scenarios are very sensitive to these
parameters. Therefore, AGE models results of alternative FTA for Mercosur
countries need to consider the uncertainty about parameters and shocks.
[Download]
REAL 04-T-3
PRODUCTIVITY CONVERGENCE AND SPATIAL DEPENDENCE AMONG SPANISH REGIONS
Sandy Dall’erba
Abstract: This paper estimates the evolution of labor productivity
disparities among 48 Spanish regions over 1980-1996 according to the concepts
of Beta- and Sigma-convergence and emphasizes the importance of including
both spatial effects and a disaggregate analysis at a sectoral level. Various
recent contributions have tested the origin of productivity differentials
among regions in Europe (Esteban, 2000; Maudos et al., 2000; Cuadrado-Roura
et al., 1999, among others). However, despite the literature focusing on
the essential role of spatial dependence, the impact of neighboring locations'
productivity has not been widely investigated. The results display that spatial
effects vary from one sector to another and Beta- convergence in labor productivity
is greater at the aggregate level than at the level of agriculture and industry,
but not of services. When Sigma-convergence is examined in order to measure
the narrowing of inequalities, it reveals that convergence occurs in aggregate
labor productivity but not in productivities by sector. The reason comes
from a transfer of resources from agriculture towards more productive sectors
that has been more pronounced in the poor regions than in the rich ones.
[Download]
REAL 04-T-2
THE DETERMINANTS OF THE REGIONAL FOREIGN DIRECT INVESTMENT IN CHILE
Johanna D. Robles and Geoffrey J.D. Hewings
[Download]
REAL 04-T-1
STRUCTURAL CONVERGENCE OF THE NATIONAL ECONOMIES OF EUROPE
Marco Percoco, Sandy Dall’erba and Geoffrey J.D. Hewings
[Published in Van Geenhuizen M., Reggiani A. et Rietveld P. (Eds.), Policy Analysis of Networks and Regions, Ashgate, Aldershot , UK , forthcoming]
Abstract: Analysis of convergence has centered on movement of indices such as per capita incomes or welfare for countries or regions within countries. In this paper, the analysis focuses on the structure of economies in terms of the distribution of production across sectors and explores the implications of convergence of structure for a subset of EU countries. To assist in the exploration, some new methodology is introduced, based on the notion of a field of influence of change. A set of sensitivity indices and an associated importance matrix are constructed for a set of intercountry input-output tables. The results find that sectors at the European level are become more similar than the national economies as a whole.
REAL 03-T-32
TEMPORAL CHANGES IN THE STRUCTURE OF CHICAGO'S ECONOMY: 1980 -
2000
Dong Guo, Geoffrey J.D. Hewings and Michael Sonis
Abstract: In an attempt to further explore the impact of
structural changes in the Chicago economy, two methods will be employed to
attempt to reveal the nature of any fragmentation/hollowing out process operating
in the Chicago economy, namely the superposition decomposition method and
Q-analysis. Superposition decomposition can decompose a flow into the sum
of a set of weighted extreme tendencies acting according to each extreme
tendency's importance in the total intermediate flows. Q-analysis provides
an alternative "slicing" procedure to uncover a hierarchy in the
structure of relationships. Using a set of annual input-output tables, the
applications to Chicago's economic structure analysis in the period of 1980
to 2000 revealed the development of a simpler production structure inside
the region, the declining interactions of manufacturing with other sectors
in the region while there was increasing interactions of service with other
sectors. While the total output of manufacturing did not decrease, all these
features provide another evidence of hollowing-out effect in Chicago's economy
found by others (Hewings et al., 1998). Also, it reveals production fragmentation
patterns at the regional level, paralleling findings of similar processes
at the international level.
[Download]
REAL 03-T-31
A Multi-layered Approach to the Measurement of Intra-Regional Interdependence
within a Metropolitan Region
Geoffrey J.D. Hewings, Michael Sonis and Chokri Dridi
[Coming soon]
REAL 03-T-30
MIYAZAWA MEET CHRISTALLER: SPATIAL MULTIPLIERS WITHIN A TRIPLE
DECOMPOSITION OF INPUT-OUTPUT CENTRAL PLACE SYSTEM
Michael Sonis and Geoffrey J.D. Hewings
Abstract: A new triple UDL-factorization (U represents
an upper-triangular block matrix, L represents a lower-triangular block matrix,
and D represents the diagonal block matrix) of the Leontief inverse is based
on the Schur block-inversion of matrices. This factorization is applied to
the decomposition of the Leontief inverse for input-output systems within
a central place hierarchy of the Christaller-Lösch, Beckmann-McPherson type.
Such a factorization reflects the process of gradual complication of the
central place hierarchy and the parallel augmentation of backward and forward
linkages within it. In this scheme the classical Miyazawa interrelation income
multipliers play the role of spatial backward and forward linkages multipliers
within developing hierarchical central place systems of towns, cities and
central capital.
[Download]
REAL 03-T-29
DOES INDUSTRY MIX MATTER IN REGIONAL BUSINESS CYCLES?
Yangsu Park and Geoffrey J.D. Hewings
Abstract: This paper tackles two issues: (1) lead and lag
relationship among regions and the role of the industry mix effect to this
phenomenon are explored; (2) concurrent and lagged effects of the industry
mix on the regional economic fluctuations are measured explicitly with the
national shock identified from the principal components method. The empirical
analysis focuses on five Midwest states. The findings reveal that, the business
cycles of Michigan, Ohio, Indiana and Wisconsin coincide with the national
cycle while the cycle of Illinois lags the national cycle by 3 to 4 months.
This phenomenon turns out to be generated from the differences in industry
structure since the manufacturing sector reacts promptly to the national
shock while the services sector respond in a few months. As a result, relatively
service-oriented Illinois lags other neighboring states. Regression analysis
reveals that the industry mix effects explain more than 60 percent of the
variance of the state coincident index and around 40 percent of the variation
of state total non-farm employment. In addition, the simulation of VAR model
demonstrates that the transmission mechanism and autoregressive property
of economic activity expand the time differences in the business cycles among
regions caused by the industry mix effects.
[Download]
REAL 03-T-28
LOCAL VERSUS GLOBAL CONVERGENCE IN EUROPE: A BAYESIAN SPATIAL ECONOMETRIC
APPROACH
Cem Ertur, Julie Le Gallo and James P. LeSage
Abstract: Numerous studies have pointed to the econometric
problems introduced by heterogeneity in cross-sectional data samples used
to explore convergence suggested by neo-classical growth models. We introduce
a local concept of convergence along with a Bayesian locally linear spatial
estimation method to address these problems. The method allows global and
local ß-convergence to be viewed in a continuous fashion. Inference regarding
global convergence can be treated as a mixture distribution arising from
local ß-convergence estimates from each region in the sample. Taking this
approach eliminates the need to specify sub-samples and regimes as well as
parameter variation schemes that have been used to model heterogeneity. We
illustrate the method using a sample of 138 European regions.
[Download]
REAL 03-T-27
CHANNELS OF SYNTHESIS FORTY YEARS ON: INTEGRATED ANALYSIS OF SPATIAL
ECONOMIC SYSTEMS
Geoffrey J.D. Hewings, Suahasil Nazara and Chokri Dridi
[Published in: Journal of Geographical Systems 2004, 6, 1: 7-25]
Abstract: Isard's vision of integrated modeling that was laid out in the 1960s book Methods of Regional Science provided a road map for the development of more sophisticated analysis of spatial economic systems. Some forty years later, we look back at this vision and trace developments in a sample of three areas - demographic-econometric integrated modeling, spatial interaction modeling, and environmental-economic modeling. Attention will be focused on methodological advances and their motivation by new developments in theory as well as innovations in the applications of these models to address new policy challenges. Underlying the discussion will be an evaluation of the way in which spatial issues have been addressed, ranging from concerns with regionalization to issues of spillovers and spatial correlation.
REAL 03-T-26
REGIONAL PRODUCTIVITY DIFFERENTIALS IN POLAND, HUNGARY AND THE
CZECH REPUBLIC
Sandy Dall'erba, Yiannis Kamarianakis, Julie Le Gallo, and Maria
Plotnikova
Abstract: This paper starts by describing the distribution
of GVA, employment and productivity growth across the regions of Poland,
Hungary and the Czech Republic. Next, we investigate in what extent regional
per capita income gaps to the European average can be attributed to differences
in productivity per worker. Finally, we extend Esteban's (2000) shift-share
analysis to measure how regional productivity gaps are due to differences
in industrial mix as opposed to region-specific factors. The results point
out the greater influence of the second element and therefore support policies
benefiting homogenously all the sectors in the least developed regions.
[Download]
REAL 03-T-25
COLOMBIAN REGIONS: COMPETITIVES OR COMPLEMENTARIES?
Jaime Bonet
Abstract: This paper analyses the characteristics of interregional
competition and complementarity in Colombia during the period 1960 - 1996.
The analysis is based on an application of the Dendrinos-Sonis model that
is estimated using the Seemingly Unrelated Regression (SUR) estimator. The
evidence shows a country with a low level of integration among the different
regions and a high level of competition. The regions that have the major
proportion of national GDP - Bogotá, West-Central and Pacific - exhibit a
competitive relationship, and the New Departments which is the region with
the larger GDP growth rate in the last decades shows only a significant relationship
with itself. These findings are consistent with the observe income polarization
process. Policy makers must take into account the competitive regional relationships
to propose adequate policies such as the adoption of regional redistribution
strategies, or other interventions (i.e. construction of infrastructure)
that might enhance regional interaction and integration.
[Download]
REAL 03-T-24
AN APPLICATION OF INTEGRATED TRANSPORT NETWORK-MULTIREGIONAL CGE
MODEL II: CALIBRATION OF NETWORK EFFECTS OF HIGHWAY
Euijune Kim and Geoffrey J.D. Hewings
Abstract: A transportation network-multiregional CGE model
is applied to estimate the network effects of a set of highway projects on
the value-added by region and industrial sector for the construction and
operation periods. Among nine highways in an east-west direction in Korea,
the East-West 9 highway increases the GDP by 0.300% over the 30-period time
horizon with 0.016% of the GDP as the network effect. This network effect
is defined as a difference between summation of the net increase in the GDP
from the development of each sub-link of the highway without the spatial
linkage and the change in the GDP resulting from the concurrent development
of the whole links with spatial linkages. Also, the highway has the largest
network effect on the manufacturing sector of Kwangju Metropolitan Area by
0.164 billion US$ per year, resulting in a gain in the regional GRP per capita
by 15.88 US$ per year. Since more network effects are generated in the less-development
regions such as Kwangju rather than the developed regions, highway development
can contribute to the reduction in regional disparities.
[Download]
REAL 03-T-23
PyIO: A PYTHON MODULE FOR INPUT-OUTPUT ANALYSIS
Suahasil Nazara, Dong Guo, Geoffrey J.D. Hewings and Chokri Dridi
[Download]
REAL 03-T-22
AN EXPLORATORY SPATIAL DATA ANALYSIS OF BRAZILIAN INTERREGIONAL
TRADE (1985-1996)
Fernando Salgueiro Perobelli and Eduardo Amaral Haddad
Abstract: The aim of this paper is to explore the spatial
distribution of the interregional trade among the 27 Brazilian states for
the years 1985-1996. To implement this methodology we use, as a dataset,
the exports and imports flows of the Brazilian interregional input-output
matrix. Based on a set of tools of spatial analysis its possible to detect
the presence of global and local spatial autocorrelation in the distribution
of trade and its components. The results of LISA statistics enable us to
observe the presence of spatial heterogeneity in the interregional trade
during the period of analysis. This paper concludes that, the detection of
spatial clusters of high and low interregional trade throughout the period
is an indication of the persistence of spatial disparities among the Brazilian
states.
[Download]
REAL 03-T-21
TOWARDS REGIONAL GROWTH DECOMPOSITION WITH NEIGHBOR’S EFFECT: A
NEW PERSPECTIVE ON SHIFT-SHARE ANALYSIS
Suahasil Nazara and Geoffrey J.D. Hewings
Abstract: The goal of this paper is twofold. The first
goal is to incorporate spatial structure within shift-share analysis, to
take into account interregional interaction in the decomposition analysis.
Secondly, this paper develops a taxonomy of regional growth rate decompositions.
A taxonomy of the spatial structure is presented; it comprises twenty alternative
decomposition structures, including the original standard shift-share analysis
as well as six alternative structures outlined in the taxonomy for non-spatial
structures.
[Download]
REAL 03-T-20
MOVEMENT OF EQUILIBRIUM OF COURNOT DUOPOLY AND THE VISUALIZATION
OF BIFURCATIONS OF ITS ADJUSTMENT DYNAMICS
Michael Sonis and Chokri Dridi
Abstract: This paper deals with the analytical and graphical
representation of the bifurcations appearing from the adjustment dynamics
of a 2-player Cournot duopoly, proposed by Puu (1997). We establish admissibility
conditions on the initial state of the adjustment dynamics and visualize
the dynamics in the space of orbits.
[Download]
REAL 03-T-19
SPATIAL-TIME SERIES MODELING: A REVIEW OF THE PROPOSED METHODOLOGIES
Yiannis Kamarianakis
Abstract: This paper discusses three modeling techniques,
which apply to multiple time series data that correspond to different spatial
locations (spatial time series). The first two methods, namely the Space-Time
ARIMA (STARIMA) and the Bayesian Vector Autoregressive (BVAR) model with
spatial priors apply when interest lies on the spatio-temporal evolution
of a single variable. The former is better suited for applications of large
spatial and temporal dimension whereas the latter can be realistically performed
when the number of locations of the study is rather small. Next, we consider
models that aim to describe relationships between variables with a spatio-temporal
reference and discuss the general class of dynamic space-time models in the
framework presented by Elhorst (2001). Each model class is introduced through
a motivating application.
[Download]
REAL 03-T-18
INTERDEPENDENCE AMONG THE BRAZILIAN STATES: AN INPUT-OUTPUT APPROACH
Fernando Salgueiro Perobelli and Eduardo Amaral Haddad
Abstract: The principal aim of this paper is to evaluate
the inter-regional linkages based on the many-region input-output table for
Brazilian regions, for the year 1996, elaborated by FIPE. This work utilizes
the extraction method by Strassert, 1968 and Schultz, 1977 and modified by
Dietzenbacher et al (1993). Instead of extracting one sector from a sector-based
model, we will examine the effects of hypothetically extract a region from
a many-region model. The method calculates the "backward linkages";
the "forward linkages" are obtained analogously from the matrix
of allocation coefficients.
[Download]
REAL 03-T-17
TWO-LAYER FEEDBACK LOOP STRUCTURE OF THE REGIONAL ECONOMIES OF
INDONESIA: AN INTERREGIONAL BLOCK STRUCTURAL PATH ANALYSIS
Nuzul Achjar, Geoffrey J.D. Hewings, and Michael Sonis
Abstract: This paper examines the structure of interregional
dependency in a five-region division of the Indonesian economy for 1995.
An interregional social accounting matrix was constructed with direct interregional
flows limited to those of the production accounts. An interregional version
of Block Structural Path Analysis was applied to construct the chains of
dependency resulting from injections in selected accounts in each region
in turn. The results revealed once again the continuation of the asymmetry
between the dependencies between Jawa and Sumatera on the one hand and these
two regions and the remaining three regions in the country. While significant
interregional leakages existed from changes in levels of activity in the
eastern part of the country, the reverse was not the case when change was
initiated in Jawa or Sumatera.
[Download]
REAL 03-T-16
THE INTERDEPENDENCE OF GOODS AND SERVICES IN A BLOCK STRUCTURAL
PATH ANALYSIS IN THE INDONESIAN ECONOMY
Nuzul Achjar, Geoffrey J.D. Hewings, and Michael Sonis
Abstract: The purpose of this paper is to reveal the magnitude
of the relationship between goods and service sector that is originally grouped
into production activities in an Indonesian social accounting matrix (SAM)
framework in 1995 and 1998. Prior to the decomposition of goods and services,
general pattern of the structural change in the Indonesian economy using
1975-1999 aggregated SAM will be presented. Using block structural path analysis
(BSPA) that traces feedback loop effects, there is continued evidence of
the dominant role of the goods sector in generating factorial and institutional
incomes in the Indonesian economy. The changes in structure generated by
the 1997 fiscal crisis are clearly evident
[Download]
REAL 03-T-15
A HIERARCHICAL BAYESIAN APPROACH FOR SPATIAL TIME SERIES MODELING
Yiannis Kamarianakis
Abstract: Despite the fact that the amount of datasets
containing long economic time series with a spatial reference has significantly
increased during the years, the presence of integrated techniques that aim
to describe the temporal evolution of the series while accounting for the
location of the measurements and their neighboring relations is very sparse
in the econometric literature. This paper shows how the Hierarchical Bayesian
Space Time model presented by Wikle, Berliner and Cressie (Environmental
and Ecological Statistics, l998) for temperature modeling, can be tailored
to model relationships between variables that have both a spatial and a temporal
reference. The first stage of the hierarchical model includes a set of regression
equations (each one corresponding to a different location) coupled with a
dynamic space-time process that accounts for the unexplained variation. At
the second stage, the regression parameters are endowed with priors that
reflect the neighboring relations of the locations under study; moreover,
the spatio-temporal dependencies in the dynamic process for the unexplained
variation are being established. Putting hyperpriors on previous stages'
parameters completes the Bayesian formulation, which can be implemented in
a Markov Chain Monte Carlo framework. The proposed modeling strategy is useful
in quantifying the temporal evolution in relations between economic variables
and this quantification may serve for excess forecasting accuracy.
[Download]
REAL 03-T-14
REGIONAL CONVERGENCE AND THE IMPACT OF EUROPEAN STRUCTURAL FUNDS
OVER 1989-1999: A SPATIAL ECONOMETRIC ANALYSIS
Sandy Dall'erba and Julie Le Gallo
Abstract: The aim of this paper is to assess the impact
of structural funds on the convergence process of 145 European regions over
1989-1999. With the aim of enhancing cohesion, these funds are primarily
allocated to the least developed regions. The most important part of these
funds is devoted to transportation infrastructures, which affect the process
of industry location and induce strong spillover effects. As a result, they
do not necessarily contribute to a more even regional development. Their
impact has therefore to be seen in the light of growth rate variations of
the targeted region and of the whole sample. Using the formal tools of spatial
econometrics, we first detect strong evidence of spatial autocorrelation
in the distribution of per capita GDP. Moreover, two clusters, representative
of the core-periphery pattern, are persistent over the period and highlight
spatial heterogeneity. Structural funds and spatial effects are then included
in the estimation of the appropriate conditional -convergence model. Estimation
results display significant convergence in the peripheral regime only and
a non-significant impact of the funds. We therefore assess their impact using
another approach based on the spatial diffusion property due to correlation
in the residuals. It allows us to control for spatial spillover effects among
regions and to estimate, via simulation experiments, the impact of shocks,
proportional to structural funds, first on the growth rate of the targeted
region and second on the growth rate of all the regions of our sample. The
results show that structural funds have positively benefited to the growth
of the targeted regions, but that spillover effects are very small in peripheral
regions.
[Download]
REAL 03-T-13
NORTH-SOUTH DISPARITIES, COMPLEMENTARITY AND COMPETITION WITHIN
ITALY
Sandy Dall'erba and Marco Percoco
[Published in Scienze Regionali- Italian Journal of Regional Science,
2, 29-49
Web site: http://www.francoangeli.it/Riviste/scre.asp]
Abstract: The aim of this paper is to uncover how the patterns of competition and complementarity in the regional system of Italy can explain its persistent internal disparities in spite of cohesion efforts by the European Commission. Our analysis is based on the application of the Dendrinos-Sonis model (1988, 1990) to the Gross Regional Product of the NUTS I regions of Italy over 1951-1993. Essentially, the analysis implies that growth in regional income is similar to a zero-sum game in which the growth in one region takes place at the expense of a least one another. The results show the strong influence of Lombardia on all the regions, and the dominance of complementary relationships over competitive relationships. When the application is extended to industry, non-market services and market services, the nature of the relationships that are revealed raises interesting issues for policies supporting these sectors.
REAL 03-T-12
DETERMINANTS OF LAY-OFFS DURING INDONESIAN ECONOMIC CRISIS WITH
SPECIAL ATTENTION TO SPATIAL EFFECTS
Suahasil Nazara
Abstract: Seeking the determinants of the lay-off process
that takes place at the onset of Indonesian economic crisis in Java island,
this study robustly shows that the lay-off rate, i.e., the ratio of number
of lay-offs to the size of the labor force, is negatively related to the
economic growth rate and share of labor in informal sector; and is positively
related to the unemployment rate at the district and municipality level.
Further, this study also confirms the empirical significance of spatial effects.
Suggesting the existence of interregional spillover effect, the latter implies
some degree of integration in the districtlevel lay-off process as well as,
most likely, labor market.
[Download]
REAL 03-T-11
SPATIAL INEQUALITY ANALYSIS WITHIN A REGIONAL GROWTH DECOMPOSITION
TECHNIQUE: INDONESIAN CASE 1976-1998
Suahasil Nazara
Abstract: This paper introduces another perspective to
analyze spatial inequality, in particular within the regional growth decomposition
framework. The employed method brings about the spatial growth differencing
as a measure of spatial inequality, an alternative to the regional conditioning
principle (Quah, 1996). Results for the 1976-1998 case suggests that there
is a tendency toward more spatial equality within Indonesian five super regions
since the end of the 1980s. Thereafter, a Markov probability matrix is estimated,
based on the regional differencing data. An interesting result here is that
the current situation is not too far apart from the theoretical ergodic distribution.
Although there is a relatively great degree of mobility, both in achieving
equilibrium as well as at the steady state condition, only about half of
the provinces will end up at within + 3% difference with their neighbors’
economic growth rate.
[Download]
REAL 03-T-10
DETERMINANTS OF CAPITAL STRUCTURE: WHAT LEADS LATIN-AMERICAN
COMPANIES TO CHOOSE DEBT OR EQUITY
Fernanda F. C. Perobelli
Abstract: What is the profile of companies willing to issue
stocks? What leads some companies to prefer a high level of debt instead
of shareholders capital in order to finance new projects? Theories suggest
that a firm capital structure depends upon certain theoretical attributes
such as volatility of earnings, profitability, and size, which influence
the various costs and benefits associated with the financing decision. With
the object of proving this statement, this article applies a similar method
as adopted in Titman and Wessels (1988). Factor Analysis is used to test
proxies to the theoretical attributes and, afterward, regressions are implemented
with the objective of identifying relationships between the level of debt
chosen by the firms and their attributes. This study covers all the public
companies listed on Mexico, Argentina and Chile Stock Exchanges whose data
were available in the Economática database. Later, these results are compared
to previous findings from a work about Brazilian companies, that used the
same methodology presented here and was developed by the Perobelli and Famá
(2002).
[Download] (Paper
in Portuguese)
REAL 03-T-9
MEASURING EXTERNALITIES IN REGIONAL GROWTH: AN EMPIRICAL APPROACH
Miguel A. Márquez, Julián Ramajo and Geoffrey J.D. Hewings
Abstract: This paper focuses on the dynamic effects under
which the regional economic processes are accomplished, breaking them down
into two broad types: neighborhood (horizontal) and economy-wide (vertical)
externalities. So, by means of a proposed dynamic space-time empirical model,
it is allowed to obtain the vertical and horizontal competition structure
within a regional economic system. Co-integration/error correction modeling
techniques are used to support the existence of the competition structure
over both the short- and long-term. As an application, we show the dynamic
effects on the evolution of the regional performance of Spanish regions over
the period 1972-2000. Our results indicate that some macroeconomic forces
are operating into this Spanish system: positive and negative externalities
at both economy-wide and neighborhood levels. Findings show that a new taxonomy
of the Spanish regions could provide some guidance as to the measures regional
economic policy.
[Download]
REAL 03-T-8
IRRIGATION TECHNOLOGY ADOPTION AND GAINS FROM WATER TRADING UNDER
ASYMMETRIC INFORMATION
Chokri Dridi and Madhu Khanna
[Published in American Journal of Agricultural Economics, 87(2), (May 2005): 289-301]
Abstract: We develop a water allocation and irrigation technology adoption model under the prior appropriation doctrine with asymmetric information among heterogeneous farmers and between farmers and water authorities; farmers’ heterogeneity is defined by a mix of land quality and knowledge. We find that adverse selection reduces the adoption of modern irrigation technology. We also show that even with asymmetric information, incentives for water trade exist and lead to additional technology adoption with gains to all parties. This suggests that under asymmetric information, a thin secondary market improves the allocation of water resources and induces additional adoption of modern irrigation technologies.
REAL 03-T-7
A SHORT NOTE ON THE NUMERICAL APPROXIMATION OF THE STANDARD NORMAL
CUMULATIVE DISTRIBUTION AND ITS INVERSE
Chokri Dridi
Abstract: We provide computer codes in ANSI-C and Python
for a fast and accurate computation of the cumulative distribution function
(cdf) of the standard normal distribution and the inverse cdf of the same
function. For the cdf we use the 5th order Gauss-Legendre quadrature which
gives more accurate results compared to Excel and Matlab. The Inverse cdf
computed using rational fraction approximations gives a result that is seven-decimal
place accurate.
[Download] [Code]
REAL 03-T-6
SPATIAL ANALYSIS OF EMPLOYMENT AND POPULATION DENSITY: THE CASE
OF THE AGGLOMERATION OF DIJON, 1999
Catherine Baumont, Cem Ertur, and Julie Le Gallo
[Published in Geographical Analysis, 36, (2004) 146-176]
Abstract: The aim of this paper is to analyze the intra-urban spatial distributions of population and employment in the agglomeration of Dijon (regional capital of Burgundy, France). We study whether this agglomeration has followed the general tendency of job decentralization observed in most urban areas or whether it is still characterized by a monocentric pattern. In that purpose, we use a sample of 136 observations at the communal and at the IRIS (infra-urban statistical area) levels with 1999 census data and the employment database SIRENE (INSEE). First, we study the spatial pattern of total employment and employment density using exploratory spatial data analysis. Apart from the CBD, few IRIS are found to be statistically significant, a result contrasting with those found using standard methods of subcenter identification with employment cut-offs. Next, in order to examine the spatial distribution of residential population density, we estimate and compare different specifications: exponential negative, spline-exponential and multicentric density functions. Moreover, spatial autocorrelation, spatial heterogeneity and outliers are controlled for by using the appropriate maximum likelihood, generalized method of moments and Bayesian spatial econometric techniques. Our results highlight again the monocentric character of the agglomeration of Dijon.
REAL 03-T-5
ECONOMIC DETERMINANTS OF OUTPUT MULTIPLIER: INTERREGIONAL INPUT-OUTPUT
FRAMEWORK
Suahasil Nazara
Abstract: This study aims at identifying the economic determinants
of output multiplier obtained from 1995 Indonesian interregional input-output
table. In the identification, this study takes the spatial effects seriously.
Spatial heterogeneity and spatial dependence model are fitted to accommodate
these effects, whose existence is a direct consequence of using regional
data that can be mapped. Two important findings stand out of this study.
First is the importance of taking into account spatial effects in the identification
of output multipliers. Second, as a direct consequence of the first, is the
importance of primary input structure in determining the magnitude of output
multiplier. This study also confirms that the propensity to spend locally
is a significant variable that may affect the output multiplier.
[Download]
REAL 03-T-4
COMPETITION, COMPLEMENTARITY AND INCREASING DISPARITIES AMONG THE
REGIONS OF SPAIN AND PORTUGAL
Sandy Dall'erba
[Published in Revue d.Economie Régionale et Urbaine, 2, 311-330 Web site: http://reru.u-bordeaux4.fr/]
Abstract: The aim of this paper is to investigate the role of regional competition and complementarity on increasing internal disparities within the Iberian peninsula over the last two decades. Competitive and complementary dynamics among the regions of Spain and Portugal rely on their intense trade, which is based on a combination of their comparative advantages, increasing returns and lowered transportation costs. In that purpose, we apply first the Dendrinos-Sonis model (1988) to the Gross Domestic Product of the regions of Spain and Portugal. Essentially, the model implies that growth in one region takes place at the expense of a least one other. The results show significant complementary relationships between Este, Centro and Sur; and highlight the strong influence of Este and Madrid on all the regions. Since both countries are major beneficiaries of European cohesion efforts, we extend the application to the key sectors of regional development policies: agriculture, energy, non-market services, transportation and telecommunications. For equity issues, the nature of the relationships that are revealed encourages policies supporting the three first sectors but not the transportation and telecommunication sector.
REAL 03-T-3
R&D IN CLEANER TECHNOLOGY AND INTERNATIONAL TRADE
Slim Ben Youssef
Abstract: We consider a symmetric three-stage game played
by two regulator-firm hierarchies to capture the scale and technology effects.
Each firm produces one good sold on the market. Firms can invest in R&D
in order to lower their fixed emission/output ratio and are regulated with
costly public funds. Opening markets to international trade leads to both
more investment in R&D and production. When the sensitivity of consumers
to the environment and the investment cost parameter are sufficiently high,
pollution under common market is higher than under autarky. The social welfare
when markets are separated is higher than when there is international trade.
[Download]
REAL 03-T-2
EUROPEAN REGIONAL DEVELOPMENT POLICIES: THE TRADE-OFF BETWEEN EFFICIENCY-EQUITY
REVISITED
Sandy Dall'erba and Geoffrey J.D. Hewings
Abstract: Testing the convergence pattern of the poorest
European Union members (Ireland, Spain, Portugal and Greece) reveals that
it is characterized by a catching-up of their income on the European average,
but also increasing regional disparities within each country. Since they
are the major beneficiaries of European regional development funds, a reconsideration
of the impact of these funds on regional development is necessary. Theoretical
analysis shows when such investments come to financing intra-regional transport
infrastructures in the poorest regions they favor convergence but reduces
the country's aggregate growth rate, whereas interregional transport infrastructures
foster the aggregate growth, but lead to greater concentration in the core.
Recent estimations show that their impact on regional development depends
on the change in the region's accessibility. Therefore, transportation infrastructures
cannot always be seen as an efficient instrument to reduce interregional
disparities in Europe.
[Download]
REAL 03-T-1
DISTRIBUTION OF REGIONAL INCOME AND REGIONAL FUNDS IN EUROPE 1989-1999:
AN EXPLORATORY SPATIAL DATA ANALYSIS
Sandy Dall'erba
Abstract: The purpose of this paper is to explore the spatial
distribution of regional income and regional development funds (Community
structural funds and region's own additional funds) among 145 European regions
over 1989-1999. Using a set of tools of spatial statistics, we first detect
the presence of global and local spatial autocorrelation in the distribution
of regional per capita incomes. In other words rich (poor) regions tend to
be clustered close to other rich (poor) regions. Global and local spatial
autocorrelations also characterize the regional growth rate and regional
funds. Second, the results of LISA statistics reveal the presence of spatial
heterogeneity in the form of two spatial clusters of rich and poor regions
over the decade as well, highlighting the persistence of a significant core-periphery
pattern among European regions. However, the negative correlation between
growth and initial income tends to confirm the hypothesis of ß-convergence.
In its efforts to favor cohesion, the European Commission allocates the majority
of structural funds to peripheral regions where per capita GDP levels are
low. A positive relationship between regional growth and structural funds
is also identified among the significant results. Only Andalucia, Galicia
and Sterea Ellada show atypical linkages. These results suggest further research
including spatial effects, regional initial conditions and the spatial distribution
of regional funds in the spatial econometric estimation of regional convergence
in Europe.
[Download]
REAL 02-T-16
IMMIGRANTS AND DISCRIMINATION IN THE CITIES
Marco Percoco
Abstract: The aim of this paper is to investigate the relationship
between the spatial mismatch hypothesis and the migration decision. Under
the assumption that immigrants are discriminated in both the housing and
labor markets It is shown that the presence of segregation can lower the
profitability of migration. Some preliminary empirical evidence corroborating
the basic assumptions and results of the model is also presented. Finally
this paper explains the positive relation between the segregation and the
number of immigrants during the Great Black Migration by proving that the
function of migration profitability is not globally monotonic and that it
can be, under some restrictive conditions, an increasing function of the
level of discrimination.
[Download]
REAL 02-T-15
TRANSBOUNDARY POLLUTION, R&D SPILLOVERS AND INTERNATIONAL TRADE
Slim Ben Youssef
Abstract: We consider a symmetric three-stage game played
by a pair of regulator-firm hierarchies to capture the scale and technology
effects. Each firm produces one good sold on the market. The production process
generates pollution characterized by a fixed emission/output ratio, and cross-borders.
Firms can invest in R&D in order to lower their emission/output ratio,
and this activity is characterized by positive R&D spillovers. We show
that R&D spillovers and the competition of firms on the common market
help non-cooperating countries to internalize transboundary pollution more
efficiently. Opening markets to the international trade leads to more investment
in R&D and more production. In most cases, pollution under common market
is lower than under autarky, implying a greater social welfare. Nevertheless,
in some other cases, pollution under common market is higher than under autarky
implying that opening markets deteriorates social welfare.
[Download]
REAL 02-T-14
SPACE-TIME ANALYSIS OF GDP DISPARITIES AMONG EUROPEAN REGIONS:
A MARKOV CHAINS APPROACH
Julie Le Gallo
[Forthcoming in: International Regional Science Review]
Abstract: The purpose of this paper is to study the evolution
of GDP disparities between 138 European regions over the period 1980-1995.
Regional per capita GDP cross-sectional distribution is characterized by
means of nonparametric estimations of density functions and the growth process
is modeled as a first-order stationary Markov chain. Spatial effects are
then introduced within the Markov chain framework using regional conditioning
(Quah, 1996) and spatial Markov chains (Rey, 2001). The results of the analysis
indicate the persistence of regional disparities, a progressive bias toward
a poverty trap and the importance of geography in the convergence process.
[Download Data Appendix]
[Earlier version available under LATEC
#2001-06]
REAL 02-T-13
LIFE CYCLE CHANGES IN CONSUMPTION BEHAVIOR: AGE-SPECIFIC AND REGIONAL
VARIATIONS
Masayo Wakabayashi and Geoffrey J.D. Hewings
Abstract: While research conducted over the last two decades
has pointed to the important role played by household consumption in regional
economic models, little attention has been directed to the consumption impacts
associated not only with income changes but also life-cycle changes. Using
Japanese data, this paper explores some of the implications of life cycle
changes on consumption behavior using a modified AIDS estimation system.
Testing is directed to differences in age-specific consumption behavior and
the potential differences in consumption by age and province.
[Download]
REAL 02-T-12
AN APPLICATION OF INTEGRATED TRANSPORT NETWORK – MULTIREGIONAL
CGE MODEL I: A FRAMEWORK FOR ECONOMIC ANALYSIS OF HIGHWAY PROJECT
Euijune Kim, Geoffrey J.D. Hewings and Chowoon Hong
[Published in Economic Systems Research 16, (2004) 235-258]
Abstract: This paper develops a framework for economic analysis of highway projects that is then used to estimate the dynamic economic effects of a highway project on the economic growth and the regional disparity in Korea. The framework is composed of a transport model and a multiregional Computable General Equilibrium (CGE) model. The transport model measures a change in interregional shortest distances and the accessibility by highway project, while the CGE model estimates the spatial economic effects of the projects on the GDP, the price, and exports, and the regional distribution of wages and population. The simulation allows policy makers to determine which highway development deserves the priority for investment based on consideration of economic growth and regional economic equity in the long run. The simulation found that all the highway projects have positive effects on GDP and export growth as well as regional equity in terms of wage and population.
REAL 02-T-11
SPATIAL ANALYSIS OF REGIONAL INEQUALITIES IN TURKEY
Ferhan Gezici and Geoffrey J.D. Hewings
Abstract: In this paper, we examine regional inequalities
in Turkey not only at the inter-provincial level but for three different
regional definitions as well. The motivation draws on the findings of Gezici
and Hewings (2001) that raised questions about inequalities not only between
regions (inter-regional) but inequalities within each region. Hence, one
contribution of this paper is to test the effects of aggregation and scale
on the identification of regional inequalities using currently accepted spatial
analytic methods. The results indicate that overall inequalities are decreasing,
however spatial dependence is becoming more dominant. The Theil index indicates
that interregional inequalities are increasing while intra-regional inequalities
are declining for all spatial partitions from 1980 to 1997. Most developed
provinces are enhancing overall inequalities, although there is some evidence
of a spread effect on their neighbors.
[Download]
REAL 02-T-10
THE EUROPEAN REGIONAL CONVERGENCE PROCESS, 1980-1995: DO SPATIAL
REGIMES AND SPATIAL DEPENDENCE MATTER?
Catherine Baumont, Cem Ertur and Julie Le Gallo
[Forthcoming in International Regional Science Review, 2005]
Abstract: We show in this paper that spatial dependence and spatial heterogeneity matter in the estimation of the β-convergence process among 138 European regions over the 1980-1995 period. Using spatial econometrics tools, we detect both spatial dependence and spatial heterogeneity in the form of structural instability across spatial convergence clubs. The estimation of the appropriate spatial regimes spatial error model shows that the convergence process is different across regimes. We also estimate a strongly significant spatial spillover effect: the average growth rate of per capita GDP of a given region is positively affected by the average growth rate of neighboring regions.
REAL 02-T-9
UNDER THE HOOD. ISSUES IN THE SPECIFICATION AND INTERPRETATION
OF SPATIAL REGRESSION MODELS
Luc Anselin
[Published in Agricultural Economics, 17 (2002) 247-267]
Abstract: This paper reviews a number of conceptual issues pertaining to the implementation of an explicit “spatial” perspective in applied econometrics. It provides an overview of the motivation for including spatial effects in regression models, both from a theory-driven as well as from a data-driven perspective. Considerable attention is paid to the inferential framework necessary to carry out estimation and testing and the different assumptions, constraints and implications embedded in the various specifications available in the literature. The review combines insights from the traditional spatial econometrics literature as well as from geostatistics, biostatistics and medical image analysis.
REAL 02-T-8
VISUALIZING MULTIVARIATE SPATIAL CORRELATION WITH DYNAMICALLY LINKED
WINDOWS
Luc Anselin, Ibnu Syabri and Oleg Smirnov
Abstract: Several recent efforts have focused on adding
exploratory data analysis functionality to geographic information systems
(GIS) by integrating established statistical software with a GIS. In this
paper, we outline an alternative approach, where the functionality is built
from scratch, using a combination of small libraries of dedicated functions,
rather than relying on the full scope of existing software suites. The suggested
approach is modular and freestanding. Within an overall framework of dynamically
linked windows, it combines a cartographic representation of data on a map
with traditional statistical graphics, such as histograms, box plots, and
scatterplots. It extends earlier work on the visualization of spatial autocorrelation
to a multivariate setting, introducing a Moran Scatterplot Matrix and Multivariate
LISA Maps. The new program (DynESDA2) works on both point and polygon coverages,
implements true brushing of maps, as well as the usual linking and brushing
between maps and statistical graphs.
[Download]
REAL 02-T-7
THE PRICE EFFECTS OF INDIRECT TAXATION IN THE REGIONAL ECONOMY
OF ANDALUSIA
M. Alejandro Cardenete and Ferran Sancho
[Published in: Journal of Applied Input-Output Analysis 8, 2002]
Abstract: The goal of this paper is to use a regional social accounting matrix (SAM) to empirically study the price burden of indirect taxes in the regional economy of Andalusia, Spain, a developing region located in the south of the Iberian peninsula. The analysis uses the input-output subset of a SAM model. Adopting this approach, it is possible to capture the existing structural interdependence among productive sectors facilitating the evaluation of the implicit weights and price elasticities of the different indirect taxes, as well as indicators of consumer's welfare variations. The database used in the analysis is the SAMAND95 (Social Accounting Matrix of Andalusia, Spain, for 1995) developed by the authors. The main result of the paper is that taxes on labor use by firms carry the largest price burden of all indirect taxes, hence exerting a constraining role on the region's competitiveness.
REAL 02-T-6
TOWARD A QUANTITATIVE ANALYSIS OF INDUSTRIAL CLUSTERS II: FUZZY
SHAPLEY VALUE, ENTROPY, AND OTHER FUZZY MEASURES
Chokri Dridi and Geoffrey, J.D. Hewings
Abstract: This paper is a continuation of research in Dridi
and Hewings (2002b) that explored the application of fuzzy cluster analysis.
In this paper, we introduce a set of tools based on fuzzy set theory to quantitatively
examine the structure of input-output based industrial clusters and relations
between clusters, and to identify important sectors using a modified Shapley
value and entropy measures. The methodology is illustrated with an application
using 1990 US input-output data.
[Download]
REAL 02-T-5
DEVELOPMENT OF A REGIONAL ECONOMIC ACTIVITY INDEX FOR THE CHICAGO
METROPOLITAN AREA
Yangsu Park, John Seo and Geoffrey J.D. Hewings
Abstract: Even with strong demands for local economic activity
indices, there have been relatively few attempts to develop comprehensive
indices that are compatible with the national business coincident index developed
by NBER and Department of Commerce. In this paper, some experimental methods
are explored for generating local economic activity index. Using the Chicago
Federal Reserve Bank National Activity Index (CFNAI) and local economic indicators,
local and national dynamic factors are extracted by applying partitioned
regression and principal components methods. From these results, local economic
activity index is generated through combining national components with local
dynamic factors. Three local indices for the Chicago Metropolitan area are
produced and compared to national indices.
[Download]
REAL 02-T-4
DO BIRDS OF A FEATHER FLOCK TOGETHER?: ECONOMIC LINKAGE AND
GEOGRAPHIC PROXIMITY
Jungyul Sohn
[Published in Annals of Regional Science 38 (2004) 47-73]
Abstract: Spatial association patterns of manufacturing activities are examined in this paper with the corresponding economic linkage patterns. Four specifications are used to measure the spatial association pattern: intraindustry/intracounty (locational Gini), intraindustry/intercounty (Moran's I), interindustry/ intracounty (correlation coefficient) and interindustry/intercounty ("spatial" correlation coefficient). Two sets of spatial specification were used for the different locational context: unconstrained (full dataset) and constrained (dataset without zeros). Those concentration indices were compared with i-o coefficients for each sector to check whether the economic linkage is somehow reflected in spatial proximity patterns. The result on the 3,110 US counties for 361 manufacturing sectors revealed that, in the intraindustry context, there is little proof that stronger economic linkage results in and/or from a more concentrated pattern of the industry in both intracounty and intercounty cases. However, interindustry economic linkage reflected and/or was reflected from the spatial distribution pattern in a significantly positive way. While there has not been a significant difference between the results of intracounty (correlation) and intercounty analysis ("spatial" correlation) for the interindustry model, there was a pattern in the intraindustry model that the industry that showed clustering at a county scale had relatively weaker spatial concentration at a multi-county scale and vice versa. Results of the unconstrained and constrained specification of the data revealed important differences, implying that special care should be taken in the spatial specification to be used and how the results are to be interpreted. However, the relationship between economic linkage and spatial proximity did not substantially change between two cases except Moran's I that had conflicting signs.
REAL 02-T-3
THE EFFECT OF ASSET AND CREDIT CONSTRAINT ON THE LABOR MIGRATION
EFFICIENCY IN LESS DEVELOPED COUNTRIES
Patricio Aroca, Geoffrey J.D. Hewings and Michael Sonis
Abstract: Migration decision-making in developing economies
is addressed from the perspective of status in the labor force (unemployed
or unemployed) and traditional concerns with utility maximization are expanded
to include the role of assets and access to capital markets. A dynamic model
is formulated and the results reveal that the migration mechanism is efficient
when workers have access to borrowing from financial institutions; without
this access, migration is shown to be inefficient, a fact exacerbated when
consideration is directed to unemployed/poor workers in less prosperous regions.
[Download]
REAL 02-T-2
A SPATIAL ECONOMETRIC APPROACH TO THE ECONOMICS OF SITE-SPECIFIC
NITROGEN MANAGEMENT IN CORN PRODUCTION
Luc Anselin, Rodolfo Bongiovanni and Jess Lowenberg-DeBoer
[Published in American Journal of Agricultural Economics 86, (2004) 675-687]
Abstract: Spatial technologies such as GPS and GIS increasingly form the basis for site-specific management in crop production. This paper assesses the contribution of an explicit spatial econometric methodology in the estimation of crop yield functions that are used to optimize fertilizer application. The specific case study is for Nitrogen (N) application to corn production in Argentina, where the implementation of variable rate technology (VRT) requires methods that use inexpensive information and that focus on the inputs and variability common to Argentine growing areas. The objective of the paper is to assess the economic value of the application of spatial regression analysis to yield monitor data as a means to optimize variable rate fertilizer strategies. The data in the case study are from onfarm trials with a uniform N rate along strips and a randomized complete block design to estimate site-specific crop response functions. Spatial autocorrelation and spatial heterogeneity are taken into account in regression estimation of N response functions by landscape position, in the form of both a spatial autoregressive error structure and groupwise heteroskedasticity. Both uniform rate and VRT returns are computed from a partial budget model. The results suggest that N response differs significantly by landscape position, and that VRA for N may be modestly profitable depending on the VRT fee level Profitability depends crucially on the model specification used, with all spatial models consistently suggesting profitability, whereas the non-spatial models do not.
REAL 02-T-1
TOWARD A QUANTITATIVE ANALYSIS OF INDUSTRIAL CLUSTERS I: FUZZY
CLUSTER VS. CRISP CLUSTERS
Chokri Dridi and Geoffrey J.D. Hewings
Abstract: This paper constitutes the first part of a two-paper
series that makes use of fuzzy logic in an attempt to quantify input-output
based cluster analysis. The objective of this paper is to examine the cluster
structure of the sales and purchases profiles in input-output systems when
the principle of 'excluded middle' is violated by the use of fuzzy set theory.
The approach relies on results from the data analysis technique known as
dual scaling (Dridi and Hewings, 2002a and 2002b). A crisp clustering algorithm
known as Ward's algorithm (Ward, 1963) is used for comparison in an application
with US input-output table.
[Download]
REAL 01-T-16
ECONOMIC ASSESSMENT OF EARTHQUAKE IMPACTS ON TRANSPORTATION NETWORKS:
A SCENARIO ANALYSIS
Jungyul Sohn, Geoffrey J.D. Hewings, Tschangho John Kim, Jong Sung
Lee and Sung-gheel Jang
[Published in In Y. Okuyama and S. Chang (Eds.), Modeling Spatial and Economic Impacts of Disasters (Springer, 2004)]
Abstract: This paper establishes and examines the framework to calibrate the cost differentials on transportation networks disrupted by earthquakes, compared to normal conditions. For the analysis, a 25-year span of the final demands for 36 earthquake analysis zones (EQAZs) and for 13 economic sectors are estimated using the Dendrinos-Sonis model starting from the base year, 1993. The cost approach incorporates several sub-modules. In the event of the earthquake, transportation network loss functions by network (TNLFN) and by zone (TNLFZ) are run to obtain the network disruption ratio. The estimated results of the TNLF are entered into the final demand loss function (FDLF) to obtain reduced final demand as well as into the integrated commodity flow model (ICFM) to obtain increased transportation cost. The 1812 New Madrid earthquake is used as the basic scenario in the analysis. Stochastic models are combined and GIS integration is also discussed along with the analysis.
REAL 01-T-15
SECTORS ASSOCIATIONS AND SIMILARITIES IN INPUT-OUTPUT SYSTEMS:
AN APPLICATION OF DUAL SCALING AND FUZZY LOGIC TO CANADA AND THE UNITED
STATES
Chokri Dridi and Geoffrey J.D. Hewings
[Published in Annals of Regional Science 37, (2003) 629-656]
Abstract: Understanding the linkages in an input-output system has been addressed by various methods, but many focused on the identification of key sectors in the economy. Sonis et al. (1996) offered as a field of influence theory an alternative approach focusing on analytical importance of elements and combinations of elements. The first objective of this paper is to offer a complementary approach to the field of influence and the so-called 'Matrioshka principal' (Sonis and Hewings, 1990); the adopted approach seeks hierarchical associations (i.e. statistical dependence) between supply and demand in input-output system. The second objective of this paper is to examine the cluster structure sales and purchases profiles when the principle of 'excluded middle' is violated by the use of fuzzy sets. Both approaches are based on the data analysis technique known as dual scaling (Nishisato, 1980, 1994). Results of this approach will be applied to input-output tables of the US and Canada.
REAL 01-T-14
AN INVESTIGATION OF INDUSTRY ASSOCIATIONS, ASSOCIATION LOOPS, AND
ECONOMIC COMPLEXITY: APPLICATION TO CANADA AND THE UNITED STATES
Chokri Dridi and Geoffrey J.D. Hewings
[Published in Economic Systems Research 14, (2002) 275-296]
Abstract: Various methods were proposed to understand the
linkages in an input-output system; however many focused only on the identification
of key sectors in the economy. An alternative approach, identifying analytically
importance of elements and combinations of elements was proposed as a field
of influence theory (Sonis et al., 1996). The purpose of this paper is to
offer a complementary approach to the field of influence and the so-called
'Matrioshka principal' (Sonis and Hewings, 1990); the objectives are to identify
simple row-column associations (i.e. statistical dependence), seek hierarchical
associations between supply and demand in input-output systems and the decomposition
of economic complexity into finite stages. For the identification of simple
dependencies between rows and columns, we use a log-linear regression and
for hierarchical associations and the identification of complexity stages,
we use the data analysis technique known as dual scaling. Results of both
approaches will be applied to input-output tables of the US and Canada.
REAL 01-T-13
REGIONAL CONVERGENCE AND THE ECONOMIC PERFORMANCE OF PERIPHERAL
AREAS IN TURKEY
Ferhan Gezici and Geoffrey J.D. Hewings
[Published in Review of Urban & Regional Development Studies (2004)]
Abstract: The objective of this paper is to examine regional convergence and core-periphery relations in Turkey. The main question is if there is a transformation of interregional disparities in terms of "convergence" and performance of peripheral regions in Turkey by considering GDP per capita and covering the 1980-97 period. During the planning period in Turkey, it was suggested that "Priority Provinces in Development"(PPD) as peripheral areas should have precedence and promoted as a policy for achieving more balanced development. We examined the differentiations in the core and peripheral regions/provinces and furthermore, the "typology" of PPDs by using indicators such as population growth, migration, GDP growth, GDP per capita, industrial composition, public investments and private investments incentives. As a result of s and b convergence analyses, following Barro and Sala-i Martin (1995), there is no evidence for convergence across both provinces and the functional regions in Turkey from 1980 to 1997. Moreover, a high level of the spatial dependence and concentration of GDP per capita has been obtained. Therefore traditional core-periphery relations continue and disparities are still obvious between the east and west of Turkey. Most of the new dynamic areas are also located in the west. The PPDs share similar features and they are not differentiated except for a few examples in South Eastern Anatolia.
REAL 01-T-12
HIERARCHICAL SPATIAL INTERACTION: AN EXPLORATORY ANALYSIS
Suahasil Nazara, Geoffrey J.D. Hewings, and Michael Sonis
Abstract: Regional interaction is generally understood
as implying movement between regions at the same level of an hierarchy.
This paper extends the notion to include an hierarchical system, thus facilitating
the consideration of vertical interaction in the analysis of regional interaction.
Obviously vertical interaction is not altogether a new concept. One could
find this concept in many analyses related to national-local or federal-state
relationships. This paper is different, however, in the sense that the lower
level units are parts of a more aggregated unit that, in turn, is part of
a set of units that combine to form a national economy. A particular example
drawn in this paper is the province-region relationships for the case of
Indonesia. In this framework, provinces form a region, and regions form
the nation. The Dendrinos-Sonis model is then used as the basis of measuring
the hierarchical spatial interaction in Indonesia. The analysis will explore
the degree to which complementarity and competitive interaction revealed
at one level in the hierarchy persist at lower or higher levels.
[Download]
REAL 01-T-11
SPATIAL EXTERNALITIES, SPATIAL MULTIPLIERS AND SPATIAL ECONOMETRICS
Luc Anselin
[Published in International Regional Science Review, 26 (2003) 153-166]
Abstract: This paper outlines a taxonomy of spatial econometric model specifications that incorporate spatial externalities in various ways. The point of departure is a reduced form in which local or global spillovers are expressed as spatial multipliers. From this, a range of familiar and less familiar specifications is derived for the structural form of a spatial regression.
REAL 01-T-10
VISUALIZING SPATIAL AUTOCORRELATION WITH DYNAMICALLY LINKED WINDOWS
Luc Anselin, Ibnu Syabri, Oleg Smirnov and Yanqui Ren
Abstract: Several recent efforts have focused on adding
exploratory data analysis functionality to geographic information systems
(GIS) by integrating established statistical software with a GIS. In this
paper, we outline an alternative approach, where the functionality is built
from scratch, using a combination of small libraries of dedicated functions,
rather than relying on the full scope of existing software suites. The suggested
approach is modular and freestanding. Within an overall framework of dynamically
linked windows, it combines a cartographic representation of data on a map
with traditional statistical graphics, such as histograms, box plots, and
scatterplots. In addition, it includes several devices to visualize spatial
autocorrelation in lattice (or regional) data, such as the Moran Scatterplot
and LISA maps. This new program (DynESDA2) also implements the capability
to brush polygon coverages, simultaneous linking of multiple maps with multiple
statistical graphics, and interactive LISA maps.
[Download]
REAL 01-T-9
SPATIAL ANALYSIS OF REGIONAL INCOME INEQUALITY
Sergio J. Rey
[Published in M.F. Goodchild and D.G. Jannelle (eds.) Best Practices in Spatially Integrated Social Science. Oxford University Press (2003)]
Abstract: Questions surrounding regional economic convergence have commanded a great deal of recent attention in economics literature. As in other recent cases in the social sciences, the application of spatially explicit methods of data analysis to the convergence question has yielded important insights on regional economic growth. By contrast, the literature on regional income inequality, although somewhat older than the convergence literature, has been slower to adopt new spatially explicit methods of data analysis. This chapter helps to speed that adoption by investigating the role of spatial dependence and spatial scale in the analysis of regional income inequality in the US over the 1929-2000 period. The findings reveal a strong positive relationship between measures of inequality in state incomes and the degree of spatial autocorrelation. Additionally, a geographically based decomposition of inequality highlights a strong positive relationship between the interregional inequality share (as opposed to intraregional inequality) and spatial clustering. Finally, a new approach to inference in regional inequality analysis is suggested and demonstrated as providing a formal explanatory framework to complement the broad, but descriptive approaches in the existing literature.
REAL 01-T-8
COORDINATION OF TAXATION AND INNOVATION FOR THE PROTECTION OF THE
INTERNATIONAL ENVIRONMENT
Slim Ben Youssef
Abstract: Two regulators face an international environmental
problem because of the transfrontier polluting activity of their domestic
firm. These firms can adopt a new and less polluting production technology
by incurring an actualized investment cost. When the cost of immediate adoption
of the cleaner technology is relatively high and the environmental taxation
is well chosen, firms will adopt it at finite but different dates even though
the model is symmetric and there is no informational asymmetry. The optimal
emission tax parameter is greater under cooperation which induce firms to
adopt the friendly technology earlier than in the non-cooperative regime.
Consequently, residual emissions are lower under cooperation and intertemporal
individual social welfare is greater. However, the private diffusion is the
same in the two regimes.
[Download]
REAL 01-T-7
STRUCTURAL CHANGES IN THE BRAZILIAN INTERREGIONAL ECONOMIC SYSTEM,
1985-1997: HOLISTIC MATRIX INTERPRETATION
Edson P. Domingues, Eduardo A. Haddad, Geoffrey J.D. Hewings and Fernando
Perobelli
[Published in Australian Journal of Regional Studies 8, (2002) 21-44]
Abstract: In this paper, we focus on the changes in the interregional trade flows in the Brazilian economy. Interregional trade matrices are constructed for two years, 1985 and 1997, and a Machlup-Goodwin-type model is applied following Haddad, et al., (1999). The model is used to explore changes in the trade structure among the 27 Brazilian states. Holistic matrix methods such as cluster and structural analyses are applied to the interregional system to explore the nature of the trade structure and the changes evident over the period 1985-1997.
REAL 01-T-6
SHORT-RUN REGIONAL EFFECTS OF ALTERNATIVE STRATEGIES FOR ECONOMIC
INTEGRATION: THE CASE OF BRAZIL
Eduardo A. Haddad, Edson P. Domingues, and Fernando Perobelli
Abstract: Motivated by both economic and political objectives,
Brazil has been pursuing, in recent years, different trade arrangements in
an attempt to reinforce strategic impulses for economic development. In this
paper, alternative strategies of economic integration are evaluated from
the Brazilian perspective. Traditional trade gains and losses are considered
in a cost-competitiveness approach, based on relative changes in the industrial
cost and demand structures. In the first part of the analysis, a national
computable general equilibrium model is used in order to assess the first-round
impacts of three alternative trade liberalization scenarios. The main findings
indicate that general trade agreements under WTO negotiations are preferable
to either the implementation of a free trade area in the Americas or regional
agreements involving Mercosur and the European Union. However, each trade
arrangement would entail differential structural impacts that serve to different
development purposes. In the second part, a Machlup-Goodwin-type interregional
model is integrated to the CGE model in order to generate a top-down disaggregation
of the national results. Spatial implications of the trade policies are assessed,
showing that the trade strategies examined are likely to increase regional
inequality in the country.
[Download]
REAL 01-T-5
ECONOMIES OF SCOPE AND ECONOMIES OF AGGLOMERATION: AN EARLIER
CONTRIBUTION REVISITED
John B. Parr
[Published in Annals of Regional Science 38, (2004) 1-11]
Abstract: Following on from the work of Goldstein and Gronberg, it is argued that under certain conditions, internal economies of scope form the bases for two types of agglomeration economy. These differ from two more familiar types, which are based on internal and external economies of scale. A further two types of agglomeration economy are shown to derive from different forms of external economy. The conditions under which agglomeration economies based on internal economies may co-exist with those based on external economies are then examined. This leads to a discussion of a scheme by which the various types of agglomeration economy may be drawn together within a common framework.
REAL 01-T-4
COMPARATIVE ANALYSIS OF CHINA’S ECONOMIC STRUCTURES
BETWEEN 1987 AND 1997: AN INPUT-OUTPUT PROSPECTIVE
Dong Guo and Geoffrey J.D. Hewings
Abstract: China experienced a rapid economic growth since
1979 when it opened up. The fast transformation affected the country in many
ways including economic structure. This paper tries to identify the changes
of economic structure influenced by economic growth from input-output prospective.
The methodology is rooted in key sector analysis and complemented by presentation
of the multiplier product matrix (MPM), which presents an interpretation
of structure based on the products of the row and column of Leontief inverse,
and provides a macro-economic visualization (economic landscape) of economic
structure to make a better understanding of economic structure change of
one economy in different times. The analyses results show that heavy industries
sectors maintain dominant roles in the Chinese economy from 1987 to 1997,
but with different emphases. Labor-intensive industries like textiles are
giving way to high technology industry due to an active policy that intends
to develop high-technology. Some non-manufacturing sectors changed their
roles in the national economy and started to influence the economy in a positive
way, but the services sector has not been a key sector in national economy.
Therefore China's developing character as a developing country has not changed.
[Download]
REAL 01-T-3
SPATIAL DEPENDENCE IN THE EVOLUTION OF REGIONAL INCOME DISTRIBUTIONS
Sergio J. Rey
[A. Getis, J. Múr and H. Zoeller (eds.) Spatial Econometrics and Spatial Statistics. Palgrave, Hampshire (2002)]
Abstract: This paper introduces three measures of spatial dependence for use in the analysis of regional income distributions and their evolution. The first builds upon the notion of regional conditioning (Quah, 1996a), and is derived as a trace statistic from a modified Markov transition matrix. The remaining two statistics are intended for use in a dynamic context and measure the degree of spatial clustering and regional cohesion in income rank mobility. All three measures are applied in an empirical analysis of per capita income patterns in the lower 48 United States over the 1929-99 period.
REAL 01-T-2
INTERREGIONAL COMPETITION AND COMPLEMENTARITY IN INDONESIA
Suahasil Nazara, Michael Sonis, and Geoffrey J.D.
Hewings
Abstract: This paper examines the nature of interregional
competition and complementarity in Indonesia. The analysis is important for
the island country given the heterogeneity of the regional economies and
will provide insights into the structure of economic interactions that should
prove useful for policy-makers considering alternative decentralization schemes.
Covering the 1975-1999 period, the analysis provides a picture of the interregional
interactions by focusing on derived linkages between the regional economies.
The analysis is based on the application of the Dendrinos-Sonis model to
six major regions in Indonesia. Characterized by a discrete socio-spatial
dynamics, the model is empirically applied by making use of the log linear
interaction function. The system of interregional interactions is modeled
using the Seemingly Unrelated Regression (SUR) estimator. The quantitative
analysis confirms the prevailing belief that regions within the western part
of Indonesia complement each other, i.e., their relative share of income
increasing simultaneously. In addition, there is also evidence that the western
part is in competition with the eastern part Indonesia, i.e., the relative
share of the former increases on the expense of the latter. The nature of
the competition and complementarity that is revealed raises important issues
for the development of appropriate policy initiatives designed to address
problems of efficiency and equity in the distribution of national expenditures
in the decades ahead.
[Download]
REAL 01-T-1
TAXATION AND THE DIFFUSION OF A CLEANER TECHNOLOGY
Slim Ben Youssef
Abstract: A regulator faces an environmental problem because
of the polluting activity of firms. The latter can adopt a new and less polluting
production technology by spending an actualized investment cost decreasing
exponentially with the adoption date. When firms adopt the cleaner technology,
they produce more, pollute less, pay fewer emission taxes and as consequences
have greater profit and the social welfare is higher. If the cost of the
immediate adoption of the cleaner technology is relatively high and the environmental
taxation scheme is well designed, firms will adopt it at finite but different
dates even though the model is symmetric and there is no informational asymmetry.
Moreover, we show that technological diffusion is socially optimal. The social
adoption date of the first innovator is earlier than the private one whereas,
the contrary occurs with the second innovator. Subsidies may be used to induce
the socially-optimal-adoption dates.
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REAL 00-T-14
EXPANDED MIYAZAWA FRAMEWORK: LABOR AND CAPITAL INCOME, SAVINGS,
CONSUMPTION, AND INVESTMENT LINKS
Michael Sonis and Geoffrey J.D. Hewings
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REAL 00-T-13
QUALITY COMPETITION IN NETWORK INDUSTRIES
Chéma Abderrazak and Faysal Mansouri
Abstract: Access to monopoly segments and interconnection
requirements has been analyzed extensively in term of prices, quantities,
sunk costs and productivity. This paper considers quality competition in
network industries. The aim of this research is to determine the relationship
between access to bottleneck network facilities and quality of goods provided
by a monopoly and one or several potential competitors when industry network
is either regulated or not. Specifically, we determine the relationship between
product quality and access charges. We analyze quality competition in a regulated
industry under complete and incomplete information regimes.
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REAL 00-T-12
PROPERTIES OF TESTS FOR SPATIAL ERROR COMPONENTS
Luc Anselin and Rosina Moreno
[Published in Regional Science and Urban Economics, 33 (2003) 596-618]
Abstract: In spatial econometrics, the typical alternative of spatial autocorrelation is ex-pressed in the form of a spatial autoregressive process. While the bulk of the literature is devoted to specification tests and estimation methods for this model, alternatives have been suggested as well. In this paper, we consider an alternative that takes the form of the spatial error components formulation proposed by Kelejian and Robinson (1995). We consider a number of specification tests against this alternative, based on both a maximum likelihood framework as well as on a general method of moments estimation approach. We compare the performance of these tests in a series of Monte Carlo simulation experiments for a range of different spatial layouts and under a number of different error distributions.
REAL 00-T-11
SPATIAL DEPENDENCE AND REGIONAL CONVERGENCE IN BRAZIL
André Magalhães, Geoffrey J.D. Hewings, and Carlos R. Azzoni
Abstract: The majority of the studies on regional convergence
ignore the spatial characteristics of the problem. In a recent paper Rey
and Montouri (1999) considered the issue of income regional convergence on
US under the spatial econometric perspective. The present paper follows the
Rey and Montouri’s (1999) approach and introduces some spatial econometric
techniques for convergence among Brazilian states. State data over the 1970-95
period is considered. As in the US case, strong patters of spatial correlation
are found during the period. The spatial econometric analysis reveals that
spatial error dependence seems to be present, and by ignoring it one would
cause a model misspecification.
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REAL 00-T-10
REGIONAL SCIENCE PUBLICATION PATTERNS IN THE 1990s
Luc Anselin and Serge Rey
[Published in International Regional Science Review, 23 (2000) 323-344]
Abstract: This paper examines the publication patterns in five core regional science journals during the 1990s. Attention is paid to the thematic distribution of articles for each journal and across journals. The journals are also compared with respect to citation counts, areas of concentration and authorship patterns. The impact of each article is examined through an analysis of citations over the decade. Productivity of individual scholars is measured using article counts, page counts and citation indices.
REAL 00-T-9
SPATIAL EFFECTS AND ECOLOGICAL INFERENCE
Luc Anselin and Wendy K. Tam Cho
[Published in Political Analysis 10 (2002) 276-297]
Abstract: This paper examines the role of spatial effects, both spatial autocorrelation and spatial heterogeneity, in ecological inference. Both formally and through simulation experiments, we consider the problems associated with ecological inference and cross-level inference methods in the presence of various forms of spatial effects. Past assessments of spatial autocorrelation in aggregate data analysis were too simplistic because they focused on one-dimensional processes that are not representative of real-world data. Thus, they do not accurately portray how realistic spatial dependence affects cross-level inference. We focus on how realistic forms of spatial autocorrelation and spatial heterogeneity affect the ability to make cross-level inferences.
REAL 00-T-8
COMPUTING ENVIRONMENTS FOR SPATIAL DATA ANALYSIS
Luc Anselin
Abstract: This paper describes the functionality and architecture
of SpaceStat, the SpaceStat Extension for ArcView and the DynESDA Extension
for ArcView. It compares the features of these packages to five other software
implementations for spatial data analysis. Some ideas are formulated on generic
requirements and future directions pertaining to computing environments for
spatial data analysis.
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REAL 00-T-7
GEOGRAPHIC AND SECTORAL CHARACTERISTICS OF ACADEMIC KNOWLEDGE EXTERNALITIES
Luc Anselin, Attila Varga and Zoltan J. Acs
Abstract: This paper implements a novel approach to formalizing
spatial externalities by employing spatial econometric methods that combine
spatial dependence and spatial heterogeneity in the form of spatial regimes.
The results confirm earlier findings that academic externalities are not
uniform across sectors but also indicate important differences across sectors
in terms of agglomeration effects.
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REAL 00-T-6
TESTING FOR THE IMPACT OF EXTREME WEATHER AND CLIMATE EVENTS ON
STATE ECONOMIES
Geoffrey J.D. Hewings, Stanley Changnon and Chokri Dridi
Abstract: The impacts of extreme weather and climate events
capture significant media attention since they often inflict considerable
physical damage and loss of personal property. The expectation might be reasonably
drawn that these impacts would have significant, negative effects on the
economies in which the events occur. Using intervention analysis, an attempt
is made to explore the economic impact of selected, major extreme weather
and climate events of the last decade on the gross state products of the
states in which the event was observed. In only one case was the impact statistically
significant; in large part, the initial negative impacts of an event are
more than offset (economically) but an in-pouring of disaster relief payments
from the federal government as well as pay-outs by private insurance companies.
Hence, the analysis concludes that a true assessment of the negative impacts
may require a focus on smaller geographic scales and a further focus on time
intervals shorter than one year.
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REAL 00-T-5
SEQUENTIAL INTERINDUSTRY MODEL (SIM) AND IMPACT ANALYSIS: APPLICATION
FOR MEASURING ECONOMIC IMPACT OF UNSCHEDULED EVENTS
Yasuhide Okuyama, Geoffrey J.D. Hewings and Michael Sonis
[Published in In Y. Okuyama and S. Chang (Eds.), Modeling Spatial and Economic Impacts of Disasters (Springer, 2004)]
REAL 00-T-4
SPATIAL EVIDENCE OF AGGLOMERATION ECONOMIES IN CHICAGO
Jungyul Sohn and Geoffrey J.D. Hewings
Abstract: Agglomeration economies feature prominently in
the analysis of differences in urban economic structure across many urban
areas. While agglomeration economies between cities focus at the macro-scale
of analysis, such economies within any given city focus more on the micro
geographical scale. This paper explores agglomeration at the micro scale
and tries to reveal the spatial realization of agglomeration economies within
and between sectors. The study area is the Chicago CMSA; 306 zip code zones
and three sectors are considered; manufacturing, retail and service. The
model is based on simultaneous equation systems and 2SLS and KRP estimators.
The result shows that there are positive simultaneous relationships between
manufacturing and retail and also between retail and service while service
is a negative endogenous factor to manufacturing. The growth of retail and
service attracts more of the same kind of activities. Related to the previous
economic environment, manufacturing dominant area is not a preferable place
for retail firms to locate and vice versa. But such an area is an attractive
one for service firms. Manufacturing and retail firms prefer to choose to
locate area with higher level of manufacturing and retail activities respectively
while service firms do the opposite. The traditional "job follows people" hypothesis
is not observed to be significant in this analysis.
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REAL 00-T-3
PRODUCTIVE RELATIONS IN THE NORTHEAST AND THE REST OF BRAZIL REGIONS
IN 1995: DECOMPOSITION & SYNERGY IN INPUT-OUTPUT SYSTEMS
Joaquim J.M. Guilhoto, Michael Sonis and Geoffrey J.D. Hewings
[Published in Geographical Analysis 34, (2002) 62-75]
Abstract: Using a set of interregional input-output tables built by Guilhoto (1998) for 1995 for two Brazilian regions (Northeast and rest of the economy), the methodology developed by Sonis et al. (1997) is applied in the construction of a series of linkages such that it is possible to examine, through the nature of the internal and external interdependencies, the structure of trading relationships between the two regions. The methodology uses a partitioned input-output system and exploits techniques that produce left and right matrix multipliers of the Leontief Inverse. This procedure facilitates the classification of the types of synergetic interactions within a preset pair-wise hierarchy of economic linkages sub-systems. In general, the results show that the Northeast region has a greater dependence on the rest of the economy region than the rest of the economy has on the Northeast region, and at the same time the rest of the economy region seems to be more developed as it presents a more complex productive structure than the Northeast region.
REAL 00-T-2
ON THE SRAFFA-LEONTIEF MODEL
Michael Sonis and Geoffrey J.D. Hewings
Abstract: This paper considers the matrix forms of the
well-known Sraffa-Leontief income distribution model . The equivalence between
these matrix forms and the set of simpler models, including the Sraffian
condition of linear relations between the rate of profits r and wage rate
w* will be explored. Further, the condition that the prices vector p and
the commodities vector x are the left hand and the right hand eigenvectors
of the matrix A of direct inputs and that these vectors are the fixed points
of the Sraffian standard commodities-standard prices matrix will be evaluated.
The paper will then explore links between the Sraffa-Leontief system and
the multiplier product matrix (MPM) for the matrix A to consider new insights
generated through visualization with the help of the artificial economic
landscape. Furthermore, the connections between MPM and the Sraffian standard
commodities-standard prices matrix and their minimal information properties
are proven.
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REAL 00-T-1
INTRODUCTION TO INPUT-OUTPUT STRUCTURAL Q-ANALYSIS
Michael Sonis and Geoffrey J.D. Hewings
Abstract: The topological principles of the well-known
Atkin Q-analysis are applied to the analysis of interconnectedness of sectors
in input-output systems. The operational methodology is presented in detail
and supported by empirical application to the Israeli input-output system
for the period 1967-1988. The rank-size ordering of the elements of the Leontief
inverse, the slicing procedure and a new graphical tools - the accumulation
diagram and the complication curve - are introduced, providing a new explanation
of economic complexity through the process of structural economic complication.
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