Catalogue Description: Methods of analysis of location choice by firms, employees, and households emphasizing the role of spatial variations in agglomeration economies, scale economies, distance, transport, endowments, amenities, and local government.Models of land use, urban form, spatial competition, central place theory, and migration.Techniques of discrete choice analysis, statistical analysis of categorical data, urban system modeling, and interregional computable general equilibrium.
Objectives:(1) To understand why some places thrive and others don’t, by studying the best economic analyses available. (2) To learn how to analyze spatial economic phenomena that concern us.(3) To develop applied skills analyzing spatial data using software such as STATA, ArcViewGIS, GAMS, LIMDEP, SAS, or other software.
Prerequisites: Economics 501 (microeconomic theory) or consent of instructor.Participants need to be able to solve constrained optimization problems that may not have interior solutions.Participants without an economics, statistics, engineering, operations research, or math background are definitely welcome, but should consider enrolling on a P/NP basis.
Requirements: Grades will be based on the research paper (30%), midterm exam (30%), final exam (30%), class presentations and other assignments (10%).
Research Paper:Each student will prepare a research paper for the course. Specific topics are to be chosen by February 25 in consultation with the professor.Students must pose and test at least one hypothesis.The empirical test should rely on either spatial cross-section data, or time-series data, and a minimum of 30 observations.Completed drafts are presented to class during the last two weeks of the term.Finished papers are due May 23 (a few weeks after the final exam).
References: This course is based on journal articles.The reading list is tailored to the particular class’s theme choices.Required readings are (**)starred, and should be read before related lectures. Starred readings will either be linked by http:// address to the current reading list, or on reserve in the Economics and Sociology Reading Room (3rd Floor Heady Hall).
Reading List Econ 576 Spatial Economics Dept. of Economics, Iowa State University
Spring 2003
(** means required)
Burton, M. P. ; E. Phimister (Mar., 1995)Core Journals: A Reappraisal of the Diamond List The Economic Journal, Vol. 105, No. 429., pp. 361-373.
Introduction:
Ohta, Hiroshi and Jacques-Francois Thisse, editors (1993) Does Economic Space Matter?:Essays in Honour of Melvin Greenhut New York: St Martin's Press.
Firms: Location, Spatial Pricing, Market Areas:
Anderson, S., de Palma, A. & Thisse, J.-F. (1992) Discrete Choice Theory of Product Differentiation. Cambridge, MA: The MIT Press.
Anderson, S., J. Goeree, and Roald Ramer (1997) “Location, Location, Location,” Journal of Economic Theory 77(1):102-127.
Anderson, Simon P., Andre De Palma and Jacques-Francois Thisse (1989)" Spatial Price Policies Reconsidered," Journal of Industrial Economics, 38(1, Sept):1-18.
Blair, John, andRobert Primus (1987) "Major Factors in Industrial Location: A Review," Economic Development Quarterly 1(1):72-85.
Carlton, Dennis W.(1983) “The Location and Employment Choices of New Firms: An Econometric Model with Discrete and Continuous Endogenous Variables, The Review of Economics and Statistics65(3):440-449
Deaton, Angus (1988) “Quantity, Quality, and the Spatial Variation of Price,” American Economic Review 78(3):418-430.
Greenhut, Melvin and Hiroshi Ohta (1975) The Theory of Spatial Pricing and Market Areas Duke University Press.
Greenhut, J., M.L. Greenhut, and Sheng-Yung Li (1980) “Spatial Pricing Patterns in the United States” Quarterly Journal of Economics94(2, Mar):329-350.
Hurter, A. & Martinich, J. S. (1989) Facility Location and the Theory of Production. Dordrecht: Kluwer Press.
Isard, Walter (1998) "Location Analysis for Industry and service trades: comparative cost and other approaches," Chapter 2pp. 7-39 in Isard, Walter; Iwan Azis, Matthew Drennan, Ronald Miller, Sidney Saltzman, and Erik Thorbecke (1998) Methods of Interregional and Regional Analysis Brookfield, VT: Ashgate
L?sch, August (1954) The Economics of Location Yale University Press. (Chapter 9: "The Market Area")
**Kilkenny, Maureen and Jacques Francois Thisse (1999) "Economics of Location: A Selective Survey," Computers and Operations Research 26:1369-1394.
Mathur, V. K. (1983) Location theory of the firm under price uncertainty. Regional Science and Urban Economics, 13, 411-428.
McCann, P. (1993) The logistics-cost location-production problem. Journal of Regional Science, 33, 503-516.
Mills, Edwin S. (1996) “The Location of Economic Activity in Rural and Nonmetropolitan United States,” Chapter 6 in The Changing American Countryside: Past, Present, and Future,” edited by Emery Castle and Barbara Baldwin, The National Rural Studies Committee, W.K. Kellogg Foundation.
Stahl, Konrad (1987) “Theories of Urban Business Location” Chapter 19 in Handbook of Regional and Urban Economics, Volume II edited by E. Mills, Amsterdam: North-Holland, Elsevier Science Publishers.
(not fully covered) Land Rent, Value, and Use
Capozza, Dennis, and Robert Helsley (1989) “The Fundamentals of Land Prices and Urban Growth,” Journal of Urban Economics 26:295-306.
People: Migration, commuting, and Compensating Differentials
Ben-Porath, Yoram (1967) "The Production of Human Capital and the Life Cycle of Earnings," Journal of Political Economy vol 75, pp 352-365.
**Clark, David E. and William J. Hunter (1992) "The Impact of Economic Opportunity, Amenities and Fiscal Factors on Age-specific Migration Rates," Journal of Regional Science, Vol. 32, pp. 349-365.
Carrington, William, Enrica Detragiache, and Tara Vishwanath (1996) “Migration with Endogenous Moving Costs” American Economic Review 86(4):909-930.
Gerking, Shelby D. and William N. Weirick.(Aug. 1983)"Compensating Differences and Interregional Wage Differentials," The Review of Economics and Statistics, 65(3):483-487.
Greenwood, Michael, Gary Hunt, and Dan Rickman (1991)"Migration, Region-al Equilibrium, and the Estimation of Compensating Differentials," The American Economic Review, 81:1328-1390.
Isserman, Andy, C. Taylor, S. Gerking, and U. Schubert (1986) "Regional Labor Market Analysis," Vol. 1 Handbook of Regional & Urban Economicspp. 543-580.
Juster, T. and F. Stafford (June 1991) "The Allocation of Time: Empirical Findings, Behavioral Models, and Problems of Measurement," Journal of Economic Literature29:471-522.
Killingsworth, Mark (1987) “Heterogeneous Preferences, Compensating Wage Differentials, and Comparable Worth,” Quarterly Journal of Economics 102(4):727-42.
Knapp, Thomas and Philip Graves (1989) "On the Role of Amenities in Models of Migration and Regional Development," Journal of Regional Science, Vol. 29, pp. 71-87.
Muth, Richard (1971) “Migration: Chicken or Egg?” Southern Economic Journal, 37(3):295-306 [see also comments and replies SEJ 39(1):39-42]
**Roback, Jennifer (1982) "Wages, Rents and the Quality of Life " Journal of Political Economy 90(6):1257-1278.
Diversity Fischer, Jeffrey and Joseph Harrington (1996) “Product Variety and Firm Agglomeration,”Rand Journal of Economics 27(2):281-309.
Holmes, Thomas J (May 1999) Localization of Industry and Vertical Disintegration Review of Economics and Statistics 81(2): 314-25.
Murphy, Kevin M., Andrei Shleifer, Robert W. Vishny (1989) “Industrialization and the Big Push” The Journal of Political Economy, 97(5, Oct):1003-1026.
Stigler, G. (1951) "The division of labor is limited by the extent of the market" Journal of Political Economy, 59:185-193.
Venables, A.J. (1996) "Equilibrium locations of vertically linked industries" International Economic Review 37:341-359.
Agglomeration and Productivity Audretsch, David and Maryann Feldman (1996) "Innovation Clusters and the Industry Life Cycle," Review of Industrial Organization 11(2):253-73.
Barkley, David, and Mark Henry (1997) "Rural Industrial Development: To Cluster or not to Cluster?" Review of Agricultural Economics 19(2):308-325.
Becker, Gary and Kevin Murphy (1992) "The Division of Labor, Coordination Costs, and Knowledge," Quarterly Journal of Economics CVII(4):1137-1160
**Ciccone, Antonio, and Robert Hall (1996) "Productivity and the Density of Economic Activity" American Economic Review 86(1):54-70.
**Ellison, Glenn and Edward Glaeser (1997) "Geographic Concentration in U.S. Manufacturing *Industries: A Dartboard Approach," Journal of Political Economy 105(5):889-927.
Glaeser, Edward L.; David C. Mare “Cities and Skills” Journal of Labor Economics, Vol. 19, No. 2. (Apr., 2001), pp. 316-342.
**Henderson, J. Vernon, Ari Kuncoro and Matt Turner (1995) "Industrial Development in Cities," Journal of Political Economy 103(5):1067-90.
Holmes, Thomas J; Stevens, John J “Geographic Concentration and Establishment Scale,” Review-of-Economics-and-Statistics. 2002; 84(4): 682-90.
Syverson, Chad (2001) “Market Structure and Productivity: A Concrete Example” job market paper
General Equilibrium (new economic geography) Fujita, Krugman, and Venables, (1999) The Spatial Economy: Cities, Regions, and International Trade Cambridge, MA: The MIT Press.
**Kilkenny, Maureen (1998) “Transport Costs and Rural Development” Journal of Regional Science 38(2): 293-312.
Holmes, Thomas J (May 1999) “Scale of Local Production and City Size” American Economic Review 89(2): 317-20
Krugman, P. and A. Venables (1996) “Integration, Specialization, and Adjustment,” European Economic Review 40(3-5).
**Krugman, Paul (1991) "Increasing Returns and Economic Geography" Journal of Political Economy vol 99, pp 483-499.
Neary, J. Peter (2001) “Of Hype and Hyperbolas: Introducing the New Economic Geography” Journal of Economic Literature 39(June):536-561.
Product Cycle Cantwell, John (1995) “The Globalization of Technology: What Remains of the Product Cycle Model?” Cambridge Journal of Economics 19(1):155-74.
Duranton, Gilles; Puga, Diego (2001) “Urban Diversity, Process Innovation, and the Life Cycle of Products” American Economic Review December; 91(5): 1454-77.
Henderson, J. Vernon (1997) “Medium Size Cities” Regional Science and Urban Economics 27(6):583-612.
Norton, R.D. (1986) "Industrial Policy and American Renewal," Journal of Economic Literature 24(March):1-40.
Vernon, Raymond (1966) "International Investment and International Trade in the Product Cycle," Quarterly Journal of Economics 80(2):190-207.
Growth
Barkley, David, Mark Henry, Shuming Bao, and Kerry Brooks (1995) “Tests for Intra-regional Spatial Association Using Spatial Data Analysis,” Papers in Regional Science 74(4):297-316.
Barro, Robert, and Xavier Sala-I-Martin (1999) Economic Growth Cambridge, MA: The MIT Press.
Barro, Robert and Xavier Sala-i-Martin (1992) "Convergence" Journal of Political Economy 100(2):223-251.
Boarnet, Marlon (1994) "An Empirical Model of Intrametropolitan Population and Employment Growth," Papers in Regional Science, 73(2):135-152.
**Duncan Black; Vernon Henderson (1999) “A Theory of Urban Growth” The Journal of Political Economy, 107(2):252-284. Carlino, Gerald and Ed Mills (Fall 1987) "The Determinants of County Growth," Journal of Regional Science27:39-54.
**Kim, Sukkoo (1997) Regions, Resources, and Economic Geography: Sources of U.S. Regional Comparative Advantage, 1880-1987NBER Working Paper; published in Regional Science and Urban Economics, 29(1, January 1999):1-32.
Lucas, Robert E. (1993) "Making a Miracle," Econometrica,61(2):251-272.
Temple, Jonathan (1999) “The New Growth Evidence” Journal of Economic Literature 37(March):112-156.
Policy Bartik, Tim (1990) "The Market-Failure Approach to Regional Economic Development Policy," Economic Development Quarterly 4(4):361-370.
Bartik, Timothy (1991) Who Benefits from State and Local Development Policies? Kalamazoo, MI:Upjohn Institute for Employment Research.
Bell, Clive and Peter Hazell(1980)"Measuring the Indirect Effects of an Agricultural Investment Project On It's Surrounding Region," American Journal of Agricultural Economics62(1):75-86.
Boadway, Robin and David Wildasin (1984) "Market Failure and the Rationale for Government Intervention," pp. 55-73 in Public Sector Economics Little, Brown, and Co., Boston.
Fisher, Peter, and Alan Peters (1998) Chapters 1,2 and 6 in Industrial Incentives, Kalamazoo, MI: W.E. Upjohn Institute for Employment Research.
Gerking, Shelby and William Morgan (1991) "Measuring the Effects of Industrial Location and State Economic Development Policy: A Survey," in Industry Location and Public Policy , Henry Herzog and Alan Schlottman, editors, Knoxville: University of Tennessee Press.
Gersovitz, Mark (1989) "Transportation, State Marketing, and the Taxation of the Agricultural Hinterland," Journal of Political Economy 97(5):1113-1137.
Hamilton, Joel, Norm Whittlesey, Hank Robinson, and John Ellis (1991) "Economic Impacts, Value-added, and Benefits in Regional Project Analysis," American Journal of Agricultural Economics 73(2):334-344.
Helpman, Elhanan and David Pines (1980) Optimal Public Investment and Dispersion Policy in a System of Open Cities” American Economic Review 70(3):507-514.
**Holmes, Tom (1998) “The Effect of State Policies on the Location of Manufacturing: Evidence from State Borders” Journal-of-Political-Economy 106(4): 667-705.
Isserman, Andrew and Terence Rephann (1994) “New Highways as Economic Development Tools: An Evaluation Using Quasi-Experimental Matching Methods,” Regional Science and Urban Economics 24(6, Dec):723-751.
Isserman, Andy (1994) "State Development Policy and Practice in the United State of America," International Regional Science Review 17:49-100.
Kilkenny, Maureen (1993) "Rural/Urban Effects of Terminating Farm Subsidies" American Journal of Agricultural Economics, 75(4):968-990.
Kilkenny, Maureen (2000) “Value-Added Agriculture Policies across the 50 States,” USDA-ERS Issue Brief
Margolis, Julius (1957) "Secondary Benefits, External Economies, and the Justification of Public Investment," The Review of Economics and Statistics39(3):284-291.
Morgan, William, John Mutti, and Mark Partridge (1989) "A Regional General Equilibrium Model of the United States: Tax Effects on Factor Movements and Regional Production," Review of Economics and Statistics 71(Nov):626-635.
Oates Wallace E. (1999) “An Essay on Fiscal Federalism” Journal of Economic Literature, 37(3):1120-1149.
Persson, Torsten, and Guido Tabellini (1999) “Political Economics and Public Finance” NBER Working Paper no W7097; April.
Walz, U. (1996) "Long-run effects of regional policy in an economic union" The Annals of Regional Science, 30:165-183.
Wohlgemuth, Darin, and Maureen Kilkenny (1998) "Firm Relocation Threats and Copy Cat Costs," International Regional Science Review21(2):139-162.
Publishing in Economics
Blinder, Alan (1974) “The Economics of Brushing Your Teeth,” Journal of Political Economy82(4, Jul-Aug):887-891.
Hamermesh, Daniel (1992) “The Young Economist’s Guide to Professional Etiquette” Journal of Economic Perspectives, 6(1):169-179.
Hamermesh, Daniel (1994) “Facts and Myths about Referring,” Journal of Economic Perspectives, 8(1):153-163.
McCloskey, Diedre, and S. Ziliak (1996) “The Standard Error of Regressions” Journal of Economic Literature 34(March):97-114.
