bluuebunny/crossref_metadata_2025 huggingface dataset:
A LONG RUN ECONOMIC EFFECT ANALYSIS OF ALTERNATIVE TRANSPORTATION FACILITY PLANS—REGIONAL AND NATIONAL
Authors: Amano Kozo , Fujita Masahisa
Published: July 2006

CONCLUSION

Initially we explained the main part of our model which enabled us to estimate and compare the long run and global economic effects of alternative transportation facility plans.

Usually the short run effects of this kind of regional economic impact have been analyzed by input‐output models, and the long run effects by econometric models. However, in this model, the input‐output model and the econometric model were combined so as to enable us to analyze the global and long run economic effects. The interregional trade pattern coefficients and input coefficients change endogenously in each year in this model. It has previously been assumed that the fixedness of interregional trade pattern coefficients and input coefficients are the weakest points in applying the interregional input‐output model for long run studies. In our model, on the contrary, variation of these coefficients has central importance.

We then showed the results which were obtained from applying this model to a comparison of the long run economic effects of alternative bridge construction plans over the Japan Inland Sea. The results obtained from this demonstrative calculation are reasonable. Thus, we think, this model has sufficient applicability to the comparison of economic effects of alternative plans for nationwide transportation facility improvement. However, the variations of production cost differentials between regions are given exogenously in this model. To make them endogenous, agglomeration economies should be considered more precisely. In that case, the applicability and the precision of this model could be improved.
A BENEFIT‐COST ANALYSIS OF A REGIONAL DEVELOPMENT INCENTIVE: STATE LOANS*
Authors: Sazama Gerald W.
Published: July 2006

The luster of economic growth, the existence of depressed regions, and the fear of competition from giveaway programs in other states have all resulted in state governments adopting a rash of programs designed to encourage a strong manufacturing base for their economy.

Many economists feel uneasy about the rapid spread of such industrial incentive programs as tax breaks, government loans, and industrial revenue bonds.1 The literature of public finance, development, and regional economics contains many interesting studies examining the wisdom of these undertakings. This paper hopes to contribute by developing a method of benefit‐cost analysis for appraisal of industrial incentive programs. Even though the model is constructed for and applied to the analysis of state government industrial development loans, the principles formulated should be easily adaptable to the assessment of other types of regional development programs.

A secondary objective of the paper is to discuss the first empirical application of a model which accounts for possible differences between the social opportunity cost of foregone investment and that of foregone consumption.2
THE OPTIMAL CONVERGENCE OF REGIONAL INCOMES*
Authors: Persky Joseph J. , Tam Mo‐Yin S.
Published: July 2006

For many policy considerations it is assumed that the convergence of regional mean income will improve national equity by reducing overall inequality. The literature on decomposability of social welfare functions implies that this assumption is unwarranted. This paper develops a notion of optimal regional convergence. In general, the point of optimal convergence depends on the shapes of the regional income distributions, the inequality index used, and the rule for distributing interregional transfers. These concepts are illustrated with data on the regional income distributions of the Southern and Northern United States.
A NEOCLASSICAL MODEL OF REGIONAL GROWTH IN INDONESIA
Authors: Giarratani Frank , Soeroso
Published: July 2006

In this paper a neoclassical model of regional growth is specified, estimated, and applied to the provinces of Indonesia. While parametric estimates indicate that factors of production respond as expected to neoclassical incentives, the attractiveness of growing regions for capital and labor inputs leads to instability and divergence among regions when the model is solved dynamically. A simulation of government intervention via a policy of encouraging capital growth in lagging regions demonstrates the potential of reversing such effects and encouraging regional convergence.
THE CHANGING STRUCTURE OF A CITY TEMPORAL CHANGES IN CUBIC SPLINE URBAN DENSITY PATTERNS*
Authors: Anderson John E.
Published: July 2006

Using the basic summary of urban structure given by the population density function, this paper estimates changes which have occurred in the structure of the Detroit metropolitan area during the past two decades. Both overall density changes and direction‐specific changes are estimated using census data and the method of cubic spline regression. The results give more revealing insight into the structural changes which have occurred in the city than has been possible with traditional models of urban population density.
A NOTE ON NEIGHBORHOOD SIZE AND THE MEASUREMENT OF SEGREGATION INDICES*
Authors: Goodman Allen C.
Published: July 2006

This note examines neighborhood segregation measures with respect to size and validity. Conventional measures, while related to within‐neighborhood homogeneity, are not necessarily related to neighborhood size. An empirical test examines racial segregation for Baltimore in 1970 and 1980 using both census tract and specially formulated neighborhood aggregates. For both years, and for all measures of segregation, the values and trends are essentially unchanged by the level of aggregation.
ON THE RELATION BETWEEN USERS' BENEFITS AND THE ECONOMIC EFFECTS OF TRANSPORTATION ACTIVITIES
Authors: Jara‐Diaz Sergio R.
Published: July 2006

ABSTRACT. The addition of output variation benefits to the users' surplus generated by transportation improvements has been subject to debate, and no agreement has been reached. In this paper, the problem is restated at the level of the origins of transportation demand, which can be derived from the information provided by the economic activity. It is shown that a competitive productive environment makes the transportation consumers' surplus exactly equal to the net economic benefits provoked in the products' markets; however, when monopolistic production prevails, the users' surplus may not reflect the benefits to the economy with accuracy. Mixed conditions are also explored and the role of final products' demand elasticity is highlighted. Different styles of welfare analysis are recommended for different market conditions.
RESIDENTIAL MOBILITY AND NEIGHBORHOOD QUALITY*
Authors: Boehm Thomas P. , Ihlanfeld Keith R.
Published: July 2006

ABSTRACT. This paper presents evidence on the factors causing residential mobility within inner‐city neighborhoods. A theoretical model is presented which posits that intraurban mobility is a response to housing consumption disequilibrium. Our data and methodology permitted more accurate measurement of disequilibrium than in previous studies, including the disequilibrium arising from neighborhood change. The major conclusion we draw from our results is that households' perceptions of the level of neighborhood quality and its change influence the mobility decisions of both renters and homeowners residing within central cities. Also, in comparison to other measured factors, neighborhood variables were found to be strong mobility predictors regardless of housing tenure. Our results imply that neighborhood improvement policies may succeed in stabilizing inner‐city neighborhoods.
HIGH‐TECHNOLOGY JOBS AND WORKER MOBILITY*
Authors: Herzog Henry W. , Schlottmann Alan M. , Johnson Donald L.
Published: July 2006

ABSTRACT. The premise of this paper is that one can discover much about the location determinants of high‐technology industry by examining the location (migration) decision of workers with high‐technology occupations. A model of the high‐technology worker migration decision is developed that permits estimation of worker response to both personal and area characteristics, the latter chosen to mirror location factors often cited by high‐technology firms as important for both the attraction and retention of their specialized work force. Logit estimates of this model between 1975 and 1980 are presented. The paper is concluded with a discussion of policy implications.
URBAN CONCENTRATION AND RURAL GROWTH A TWO‐SECTOR ANALYSIS*
Authors: Kubo Yuji
Published: July 2006

ABSTRACT. This paper examines the mechanism and extent of urban concentration using a two‐sedor growth model. The cause of urbanization is sought in the existence of urban scale economies. Assuming that temporary production decisions are concerned with optimal labor inputs and that profit incomes are reinvested according to relative profitability, the model shows persistent tendency for urban concentration and the transition of the economy from unlimited to limited labor supply. A simple example suggests that urban concentration is more likely than rural expansion with urban contraction.
ON THE STABILITY OF HOUSING SECTOR INTERACTION: EVIDENCE FROM 42 METROPOLITAN AREAS*
Authors: Emmi Philip C.
Published: July 2006

ABSTRACT. Residential vacancy chain models based on White's (1971) application of Markov chain theory are used to simulate flows of housing vacancies through a set of interdependent housing market sectors. Measures of housing sector interaction are derived from such models. Our purpose here is to address the issue of time stationarity raised by their use. U.S. census data are available to calibrate such models at two, and sometimes three, points in time. Data from 42 different SMSAs are used to generate 56 cross‐temporal comparisons with interobservation periods ranging from three to eight years. Stability of interaction is addressed from two perspectives–the sectoral perspective and the areawide perspective. Results are mixed and depend upon which measure of interaction is used, which perspective is addressed, and the duration of the interobservation period. However, within limits, findings support continued use of vacancy chain models.
THE ROLE OF INFRASTRUCTURE IN THE SUPPLY OF HOUSING*
Authors: Stover Mark Edward
Published: July 2006

ABSTRACT As the housing stock in a city is duplicated, developers must devote greater amounts of resources to the provision of infrastructure. If the production of infrastructure is characterized by decreasing returns to scale, this will cause the price of developable land to increase. The conditions under which an upward‐sloping supply curve for housing will result are discussed. Using cross‐sectional data for U.S. cities from 1973 to 1982, it is shown that land prices fail to increase with the quantity of construction and that the price elasticity of the supply of housing is infinite.
INTERREGIONAL ARBITRAGE AND THE SUPPLY OF LOANABLE FUNDS: A MODEL OF INTERMEDIATE FINANCIAL CAPITAL MOBILITY*
Authors: Harrigan Frank J. , McGregor Peter G.
Published: July 2006

ABSTRACT This paper develops a model of regional financial markets which can encompass different degrees of spatial financial integration. The behavior of the system is analyzed under alternative assumptions about the time frame of analysis and the extent of the flexibility of interest rates. It is argued that links may exist between regional real and financial sectors even in the short run and that such links must, through the regional balance of payments, exist in the long run, even where there is perfect financial spatial integration. It is observed that these relationships have generally been ignored by regional economic model builders.
AN EXAMINATION OF STATE FOREIGN EXPORT PROMOTION AND MANUFACTURING EXPORTS*
Authors: Coughlin Cletus C. , Cartwright Phillip A.
Published: July 2006

ABSTRACT As a means of promoting economic development state governments are increasing their levels of support for export promotion; however, there has been virtually no statistical analysis of the effects of the state export promotion expenditures. The present study specifies and estimates a cross‐section model in order to quantify the relationship between state export promotion and exports. The empirical analysis allows for the calculation of the export promotion elasticity of exports on a state basis. Two conclusions are that the rationale supporting export promotion expenditures is supported empirically and that there is much diversity among states for the estimated elasticity.
ELASTICITIES OF CONSTRAINED GRAVITY MODELS*
Authors: Weber James
Published: July 2006

ABSTRACT Doubly constrained gravity models require a balancing procedure to make estimated origin and destination totals consistent. We show through a series of examples that not just the magnitudes but even the signs of derivatives and elasticities of gravity model flows depend on the specific balancing procedure used. Hence, if such elasticities are regarded as meaningful, then the balancing of origin and destination totals must be regarded as an integral part of the gravity theory itself.
SERVICE EXPORTS AND REGIONAL GROWTH IN THE POSTINDUSTRIAL ERA*
Authors: Stabler Jack C. , Howe Eric C.
Published: July 2006

ABSTRACT. The role of service industries in the regional growth process has been debated for decades. Although the importance of services in providing an essential framework for the development of exports has long been acknowledged, their ability to initiate growth has never been generally accepted. In this paper the change in composition of exports from Canada's four western provinces between 1974 and 1979 is analyzed. It was observed that service exports increased more rapidly than exports of goods on both a direct and a direct‐plus‐indirect basis in 88 percent of comparisons. In absolute terms, the gain in service exports was equal to 89 percent of that for goods exports.
THE SOCIAL BENEFITS OF URBAN CULTURAL AMENITIES*
Authors: Clark David E. , Kahn James R.
Published: July 2006

ABSTRACT. This paper uses a two‐stage hedonic wage approach to derive the benefits from improvement of five cultural amenities. It is argued that the hedonic approach permits valuation of both private and local public aspects of cultural goods since access to the amenity is an essential input in the production of the final service flow. Empirical estimates of willingness to pay suggest price and income elasticities are approximately unity. Lower‐bound estimates of marginal benefits for a representative city range from $0.85 million for an additional theater to $57.9 million for an additional zoo facility.
MEDIAN, MEAN, AND OPTIMUM AS FACILITY LOCATIONS*
Authors: Hall Randolph W.
Published: July 2006

ABSTRACT The mean and the median are both measures of centrality. In one dimension, the median minimizes the average absolute distance from a facility to a set of customers {xi}, and the mean minimizes the average squared distance. In two dimensions, the median minimizes the average rectangular distance, and the mean minimizes the average squared distance. This paper investigates the “location penalty” when a nonoptimal location is substituted for the optimal location. In one dimension, the average absolute distance at the mean is never more than twice the average absolute distance at the median. Surprisingly, this happens when the median and mean are close together. In two dimensions, the ratio of the average Euclidean distance at the median to the average Euclidean distance at the optimum is never more than . However, this upper bound depends on an unlikely scenario with just two customers. With three equal‐sized customers, this ratio is never more than 1.12. However, if the triangle formed by the customers is rotated relative to the rectangular grid, the ratio never exceeds 1.028.
A SIMPLE METHOD FOR ESTIMATING QUARTERLY LOCAL‐AREA PERSONAL INCOME*
Authors: Conte Michael A.
Published: July 2006

ABSTRACT A single‐equation econometric approach is developed for estimating personal income on a quarterly basis for counties and county aggregates (e.g., metropolitan areas). An experiment is conducted on state data to test the accuracy of the estimates. The experiment indicates that they would be highly accurate for large local areas; for local areas comprising at least 20 percent of their state's total personal income, the estimates would fall within 2 percent of BEA‐type estimates 95 percent of the time. An aggregate estimation approach is shown to be preferable to a component approach. Using data on local department store sales, the quarterly personal income estimates are shown to forecast better than the currently available annual estimates.
FUNCTION AND COMPETITION AMONG URBAN CENTERS*
Authors: Keane Michael J.
Published: July 2006

ABSTRACT This paper uses a logit model of consumer choice to examine how changes in the spatial behavior of rural consumers will affect the commercial base of smaller urban places. Various socio‐economic changes in a region can be expected to cause a number of behavioral changes, including changes in where people work and shop. The analysis presented in the paper emphasizes the importance of location to the commercial prospects of small trade centers as consumers become more spatially mobile and engage in more multipurpose shopping. Places that are centrally located have the best prospects for ensuring that functions are either maintained or suffer the least decline as a result of competition from higher‐order centers. Remoter locations will be adversely affected by these competitive pressures.
IMPERFECT INFORMATION, UNCERTAINTY AND OPTIMAL SAMPLING IN LOCATION THEORY: AN INITIAL REEXAMINATION OF HOTELLING, WEBER, AND VON THÜNEN*
Authors: Asami Yasushi , Isard Walter
Published: July 2006

ABSTRACT Sophisticated locational analysis should no longer proceed without examining (1) the feasibility of reducing uncertainty about the size and spatial spread of the market, prices and other elements and (2) the practicality of information generation through sampling. The present paper points out the methodology for Hotelling‐, Weberian‐ and von Thünen‐ type location problems by examining simplified situations.
METROPOLITAN FISCAL STRUCTURE AND MIGRATION*
Authors: Fox William F. , Herzog Henry W. , Schlottman Alan M.
Published: July 2006

ABSTRACT This study examines the degree to which individuals “vote with their feet” when considering metropolitan fiscal structure. Local (and state) fiscal policies are considered in detail by investigating migration impacts of expenditures and revenues, as well as by examining effects of distribution of expenditures by type and revenues by source. These impacts are considered across three dimensions of the migration decision: the decision of a metropolitan resident to move (relocate), the decision to depart the metropolitan area, and the decision to enter such an area. Empirical results indicate that fiscal structure plays an important role within these decisions, and particularly that to depart the metropolitan area.
CASINO GAMBLING AS A “GROWTH POLE” STRATEGY AND ITS EFFECT ON CRIME*
Authors: Friedman Joseph , Hakim Simon , Weinblatt J.
Published: July 2006

ABSTRACTCasinos are often considered as a “growth pole” strategy to revitalize dilapidated regions. However, voters often reject casinos due to their perceived adverse impact on crime.

Using a quasi‐experimental design we analyze the impact of the casinos on crime spillover from Atlantic City to other localities in the region. We found that the level of crime in localities adjacent to Atlantic City and along the major nontoll routes to Philadelphia and New York City up to approximately 30 miles from Atlantic City rose significantly following the introduction of casinos. Crime levels are higher than they would have been in the absence of casinos.
THE WEBER PROBLEM: FREQUENCY OF DIFFERENT SOLUTION TYPES AND EXTENSION TO REPULSIVE FORCES AND DYNAMIC PROCESSES*
Authors: Tellier Luc‐Normand , Polanski Boris
Published: July 2006

ABSTRACT. The frequency of occurrence of the different types of solutions to the Weber problem is studied. These solutions are: a location at an attraction point due to a dominant force, to incompatible angles, or to concavity; a location at infinity; a location inside the polygon; and a location outside the polygon. Situations involving both attraction and repulsion points are examined in the triangle and in the more‐than‐three‐sided polygon context, and methods for solving the corresponding problems are compared. A trigonometric solution is proposed for the triangle case involving one repulsion and two attraction points. The variation in the frequency of a location at an attraction point when the number of attraction points increases while the number of repulsion points remains the same is observed as well. Implications of the results are studied for the analysis of dynamic location processes.
ON THE PLAUSIBILITY OF THE SUPPLY‐DRIVEN INPUT‐OUTPUT MODEL: EMPIRICAL EVIDENCE ON JOINT STABILITY*
Authors: Rose Adam , Allison Tim
Published: July 2006

ABSTRACT. This paper addresses the issue of the plausibility of the supply‐driven input‐output model from an empirical standpoint. We suggest that requiring production coefficients to remain perfectly fixed during an application of the supply‐driven input‐output model is unnecessarily restrictive given the extensive use of approximation methods in mathematics, economics and regional science. Simulations with the supply‐driven version of an input‐output table for a representative region are shown to result in changes in the corresponding production coefficients well within conventional tolerance levels.
NETWORK LOADING VERSUS EQUILIBRIUM ESTIMATION OF THE STOCHASTIC ROUTE CHOICE MODEL MAXIMUM LIKELIHOOD AND LEAST SQUARES REVISITED*
Authors: Anas Alex , Kim Ikki
Published: July 2006

Daganzo (1977, 1979), Daganzo and Sheffi (1977), Sheffi (1985), and Sheffi and Daganzo (1980) have used one assumption about traveler behavior in developing estimation techniques for the stochastic route‐choice problem and another assumption in predicting flows on networks by using the same model. In estimation, they calculate the congested travel costs of the network links from observed flows on the network, and the network is loaded based on these costs. In prediction, they follow their stochastic user‐equilibrium assumption by which travelers evaluate costs using the mean of the observed flows (or equilibrium flows). The travel‐cost coefficient obtained from the loading method systematically overestimates the true travel‐cost coefficient from which the observed flow data (which must be used in loading) is generated. The estimates of the same coefficient, obtained in this paper, by constraining the estimation results to conform to the equilibrium conditions are unbiased, and only marginally less efficient (have larger standard deviations). The average percentage error and inefficiency of the link flow predictions based on the loading method increases as the level of congestion on the network rises. In contrast, the average percentage error of link flow predictions based on the equilibrium estimation method declines and their efficiency remains very high as the level of congestion on the network rises.
SPATIAL DEPENDENCE AND SPATIAL STRUCTURAL INSTABILITY IN APPLIED REGRESSION ANALYSIS*
Authors: Anselin Luc
Published: July 2006

The stability of regression coefficients over the observation set (“regional homogeneity”) is typically assessed by means of a Chow test or within a seemingly unrelated regression (SUR) framework. When spatial error autocorrelation is present in cross‐sectional equations the traditional tests are no longer applicable. I evaluate this both in formal terms as well as empirically. I introduce a taxonomy of spatial effects in models for structural instability, and discuss its implication for testing. I compare the performance of traditional tests, robust approaches, maximum‐likelihood procedures and pretest techniques by means of a series of simple Monte Carlo experiments.
THE SENSITIVITY OF INPUT‐OUTPUT MULTIPLIERS*
Authors: Dietzenbacher Erik
Published: July 2006

The present paper derives analytical expressions for the sensitivity of input‐output multipliers to errors in the data. The effects on the simple output multipliers are investigated for additive errors, multiplicative errors in the columns, multiplicative errors in the rows, error rectangles, the error couple and the single error, and price changes. In contrast to earlier investigations, the results are not obtained from the Leontief inverse. The present approach focusses on the effects of errors on the eigenvector corresponding to the dominant eigenvalue. It is indicated how similar expressions may be derived for several other multipliers.
DERIVATIVES OF FLOWS IN A DOUBLY CONSTRAINED GRAVITY MODEL
Authors: Bröcker Johannes
Published: July 2006

For many practical applications it is important to know how the flows in a doubly constrained gravity model react to slight variations in the predetermined marginal totals. The first‐order approximation of these variations is a linear function on the set of feasible variations of marginal totals, i.e., the set of variations not violating the consistency constraint of the model. Several methods to find a matrix describing this linear function are developed and compared with former contributions to this issue. Finally, applicability of the methods to sensitivity and error propagation analysis is demonstrated.
THE IMPACT OF UNEMPLOYMENT INSURANCE BENEFITS ON THE PROBABILITY OF MIGRATION OF THE UNEMPLOYED*
Authors: Goss Ernie , Paul Chris
Published: July 2006

By ignoring individual unemployment compensation benefits and conditions of job termination, past migration research has concluded that personal unemployment doubles the likelihood of interstate labor‐force migration. Findings from the present study indicate that aggregating the unemployed, without adjusting for these two factors, overstates the probability of migration for the involuntarily unemployed benefit recipient and understates the likelihood of migration for the voluntarily unemployed benefit recipient. The results suggest that federal discretionary unemployment‐compensation programs, which are implemented during recessionary periods, likely serve to retard out‐migration of those who are involuntarily unemployed.
THE SPATIAL STRUCTURE OF HIERARCHICAL INTER‐URBAN SYSTEMS: EQUILIBRIUM AND OPTIMUM*
Authors: Zheng Xiao‐Ping
Published: July 2006

In this paper, I model a simple hierarchical inter‐urban system in which the location of business firms is considered together with the determination of residential land‐use patterns. By supposing a spatial externality between the business firms and all the residents of the region, three spatial structures are obtained: monocentricity, multicentricity, and a separate pattern where cities are spatially split with an agricultural land existing between them. It is also shown that the spatial structures of monocentric and multicentric patterns formed by the market principle tend to be more concentrated than the optimum.
A NOTE ON TRANSPORTATION RATES AND LOCATION OF THE FIRM IN A TWO‐DIMENSION, n‐INPUT SPACE*
Authors: Olson Dennis O. , Shieh Yeung‐Nan
Published: July 2006

This paper examines the theoretical implications of quantity‐discounted transportation rates on the optimum location decision of the firm. It shows that the linearly homogeneous or homothetic production function is not a sufficient condition for the independence between the optimum location and the output level, unless (i) the elasticities of transportation rates with respect to quantity shipped are constant and identical, and (ii) the ratios of marginal products 60 the marginal transportation costs are equal for each input.
DO PRODUCER SERVICES INDUCE REGIONAL ECONOMIC DEVELOPMENT?*
Authors: Hansen Niles
Published: July 2006

Goods production and services have become increasingly integrated within a flexible, information‐oriented system of production organization. In this context, it is argued here that producer services–carried out both within manufacturing firms and by “independent” enterprises–play a pivotal role in expanding the division of labor, productivity, and per capita income. This proposition is supported by results of an empirical analysis of metropolitan areas in major U.S. regions and in the nation as a whole.
A NOTE ON BILATERAL MONOPOLY AND THE OPTIMUM LOCATION OF VERTICALLY RELATED FIRMS*
Authors: Cheng Doris , Shieh Yeung‐Nan
Published: July 2006

This note considers Blair, Kaserman, and Romano's conclusion (1989) that the only optimal solution in the case of bilateral monopoly is the joint profit maximization solution and examines the pattern of industrial location under joint profit maximization.
NESTED FISCAL IMPACT MEASURES USING THE NEW THEORY OF LOCAL PUBLIC GOODS*
Authors: Heikkila Eric J. , Craig Steven G.
Published: July 2006

In this paper, we use recent advances in the theory of local public goods to develop more‐complete measures of the fiscal impacts of population change. Each fiscal impact measure extends the average‐cost‐based simple multiplier. The service‐based impact measure accounts for the public service production function. The local welfare measure further allows the size of the public budget to vary. The global welfare measure additionally introduces interneighborhood substitution of public services. These four nested measures are calculated for police servims in Vancouver. We demonstrate that the commonly used simple multiplier is an unreliable estimator of fiscal impacts.
DIRECTIONS FOR DIVERSIFICATION WITH AN APPLICATION TO SASKATCHEWAN*
Authors: Gilchrist Donald A. , St. Louis Larry V.
Published: July 2006

ABSTRACT. Traditional models of regional diversification do not capture the trade‐off between stability and living standards. In this paper, we characterize regions as open activity models subjected to both productivity and price shocks. We then partially rank small diversification policies by the direction in which they point away from the current industrial structure in mean‐variance space. Some general patterns emerge. In particular, diversification for regional self‐sufficiency and away from regional comparative advantage may be undesirable.
GENERAL EQUILIBRIUM OF A REGIONAL ECONOMY WITH A FINANCIAL SECTOR–PART I: AN ACCOUNTING FRAMEWORK WITH BUDGET AND BALANCE SHEET LINKAGES
Authors: Hughes Merritt
Published: July 2006

ABSTRACT. An accounting framework is presented that can be used as a basis for a regional general equilibrium economic model that meaningfully incorporates both real and financial activity. The accounting framework describes a circular flow from regional income to credit base, and back to regional income, including the balance of payments identity. Both real market transactions and capital stock changes are explicitly recognized. Linkages between real activity flows and sectoral balance sheets are highlighted. Financial activity is recognized as a service, and all assets are assumed to be valued at market prices.
THE EFFECTS OF REGIONAL SCIENCE AND TECHNOLOGY POLICY ON THE GEOGRAPHIC DISTRIBUTION OF INDUSTRIAL R&D LABORATORIES*
Authors: Bania Neil , Calkins Lindsay N. , Dalenberg Douglas R.
Published: July 2006

ABSTRACT. The determinants of the geographic distribution of industry R&D activity are examined with particular emphasis on the role of university research as well as state science and technology programs. An analysis of a cross section of metropolitan areas indicates that industry R&D labs are located in areas with state science and technology programs, as well as in areas with higher levels of university research, larger quantities of non‐welfare related local government spending, a better educated workforce, and a greater population density.
ON FRONTIER SPECIFICATIONS FOR DISCRETE BINARY CHOICE ANALYSIS
Authors: Viton Philip A.
Published: July 2006

ABSTRACT. In estimating a discrete choice model one is actually estimating the parameters of a conditional indirect utility function. I explore the consequences of recognizing that this function is a maximum‐value (frontier) function. I formulate several frontier choice models and, using a pilot empirical study of transportation mode choice, compare the resulting estimates with those of the conventional logit specification. Most strikingly, it appears that the values of time implied by the frontier models are substantially below those of the logit model. This implies that policies designed to improve travel times may be of less value to consumers than is conventionally believed.
PROBIT WITH SPATIAL AUTOCORRELATION
Authors: McMillen Daniel P.
Published: July 2006

ABSTRACT.Commonly‐employed spatial autocorrelation models imply heteroskedastic errors, but heteroskedasticity causes probit to be inconsistent. This paper proposes and illustrates the use of two categories of estimators for probit models with spatial autocorrelation. One category is based on the EM algorithm, and requires repeated application of a maximum‐likelihood estimator. The other category, which can be applied to models derived using the spatial expansion method, only requires weighted least squares.
WHAT ATTRACTS FOREIGN MULTINATIONAL CORPORATIONS? EVIDENCE FROM BRANCH PLANT LOCATION IN THE UNITED STATES
Authors: Friedman Joseph , Gerlowski Daniel A. , Silberman Johnathan
Published: July 2006

ABSTRACT. The location decisions of foreign multinational corporations (FMNCs) are analyzed using a conditional logit model with states as the choice set. We consider the establishment of new manufacturing plants and separately analyze the site selection of all MNCs, Japanese MNCs, and European MNCs. The results indicate that access to markets, labor market conditions, state promotional efforts to attract foreign investment, and state and local personal taxes are significant fadors in the location decision. The decision determinants for Japanese and European MNCs are found to be different.
WEBER'S PROBLEM WITH ATTRACTION AND REPULSION*
Authors: Chen Pey‐Chun , Hansen Pierre , Jaumard Brigitte , Tuy Hoang
Published: July 2006

ABSTRACT. Weber's problem consists of locating a facility in the plane in such a way that the weighted sum of Euclidean distances to n given points be minimum. The case where some weights are positive and some are negative is shown to be a d.‐c. program (i.e., a global optimization problem with both the objective function and constraint functions written as differences of convex functions), reducible to a problem of concave minimization over a convex set. The reduced problem is then solved by outer‐approximation and vertex enumeration. Moreover, locational constraints can be taken into account by combining the previous algorithm with an enumerative procedure on the set of feasible regions. Finally, the algorithm is extended to solve the case where obnoxiousness of the facility is assumed to have exponential decay. Computational experience with n up to 1000 is described.
THE ROLE OF EQUILIBRIUM AND DISEQUILIBRIUM IN MODELING REGIONAL GROWTH AND DECLINE: A CRITICAL REASSESSMENT
Authors: Graves Philip E. , Mueser Peter R.
Published: July 2006

ABSTRACT. The assumption of interregional equilibrium in migration research has recently been attacked. At issue is the motivation for on‐going migration if rents and wags accurately compensate for spatial amenity variations; but if rents and wages fail to accurately compensate potential migrants, then amenity valuations must be flawed. We here show that arguments supporting substantial disequilibrium in the US. economy are unconvincing. The substantive issues are then clarified by a model which allows for both equilibrium and disequilibrium migration. We conclude that intertemporally systematic migration stems predominantly from equilibrium forces.
FIRST NATURE, SECOND NATURE, AND METROPOLITAN LOCATION
Authors: Krugman Paul
Published: July 2006

ABSTRACT. Economies of scale, transportation costs, and factor mobility can interact to produce agglomerations even in the absence of any pure external economies. This paper offers a monopolistic competition model of a city that serves an agricultural hinterland; unlike most analyses in location theory, the model is fully general equilibrium, but it has strong links to older concepts in geography, notably the idea of “market potential.” The analysis shows that the forward and backward linkages that hold a population concentration together also allow that concentration to occur in a variety of possible sites—that is, there are multiple equilibria (indeed a continuum) for metropolitan location.
THE INFLUENCE OF ECONOMIC DIVERSITY ON UNEMPLOYMENT AND STABILITY*
Authors: Malizia Emil E. , Ke Shanzi
Published: July 2006

ABSTRACT. For many years, regional scientists, economists, and geographers have been unable to clarify the influence of economic diversity on unemployment and instability in regional economies of the United States, the United Kingdom, and Canada. This article presents plausible theory, proper units of analysis, valid measures, and more inclusive models of the diversity‐stability relationship. The findings are generalizable because the sample includes most metropolitan areas in the U.S. The empirical analysis estimates the influence of diversity, employment concentrated in unstable industries, population size, growth rate, and control variables on unemployment and employment instability during the 1972–88 period. The results indicate that metropolitan areas which are more diverse experience lower unemployment rates and less instability than areas which are less diverse.
A MIXED‐FREQUENCY MODEL OF REGIONAL OUTPUT*
Authors: Israilevich Philip R. , Kuttner Kenneth N.
Published: July 2006

ABSTRACT. This paper proposes a new method for estimating a monthly regional production model. The technique involves treating the region's monthly industrial output as a latent variable, which is in turn a function of capital (prosed by energy usage) and labor inputs. Annual observations on regional value added correspond to the summation of the unobservable monthly series over the 12 months, while changes in the national Industrial Production index help infer the series' month‐to‐month fluctuations. The model is estimated using the Kalman filter and the method of maximum likelihood. The estimates are used to compute monthly indices of regional value added for 15 individual 2‐digit industries, and for the aggregate manufacturing sector in the Seventh Federal Reserve District. In a comparison of out‐of‐sample forecasting accuracy, the mixed‐frequency model outperforms both the traditional parametric Cobb‐Douglas and nonparametric Atlanta methods over the 1988–89 forecasting horizon.
THE LOGISTICS‐COST LOCATION‐PRODUCTION PROBLEM*
Authors: McCann Philip
Published: July 2006

ABSTRACT. The paper applies an inventory model to the standard Weber‐Moses location‐production problem. By setting the problem within a time framework, costs are seen to be incurred by both the holding of goods and the shipment of goods. The optimum location of the firm is seen to depend not only on transportation costs and the nature of the firm's production function, but also on the value of the materials being shipped. Under these conditions there is no homogeneous solution to the Weber‐Moses problem. Furthermore, it is shown that the value added at the point of production is the primary factor which governs the optimum location of the firm.
PRICE UNCERTAINTY AND PRODUCTION‐LOCATION DECISIONS UNDER FREE ENTRY OLIGOPOLY*
Authors: Mai Chao‐cheng , Yeh Chiou‐nan , Suwanakul Sontachai
Published: July 2006

ABSTRACT. This paper departs from earlier work on location theory under uncertainty by considering an oligopoly case where the symmetric Cournot‐Nash equilibrium of imperfectly competitive and identical firms are examined. It will be shown that once a Cournot competitive equilibrium is introduced, the demand function plays a central role in the choice of location, and the effects of changes in fixed costs, mean product price and price variability on the firm's optimum location and output are independent of absolute and/or relative risk aversion. These striking results are in sharp contrast with the well‐known results obtained in previous contributions to the location literature.
REEVALUATING THE ‘PROCOMPETITIVE’ EFFECTS OF HMOs: A SPATIAL EQUILIBRIUM APPROACH*
Authors: Beazoglou Tryfon , Heffley Dennis
Published: July 2006

ABSTRACT. .The growth of health maintenance organizations (HMOs) commonly has been viewed as a “procompetitive” change in the structure of the health care delivery system. Because HMOs collect a prepaid fee from subscribers, they serve a dual role as insurers and providers of health care. While HMOs may have competed directly with conventional insurance plans, their effect in health care markets is potentially quite different. A multisector spatial equilibrium model, which incorporates the optimizing behavior of consumers, independent fee‐for‐service(FFS)providers, and a centralized HMO, is used to explore the effects of an exogenous shift in market structure away from FFS delivery toward the provision of seivices by the HMO. As more physicians are diverted from FFS practice to enter the HMO, both the HMO membership fee and prices in the FFS sector tend to rise. This pattern is consistent with empirical trends in the United States during the 1980s where, despite the rapid growth in HMOs and other forms of prepaid care, both FFS prices and HMO membership fees have risen sharply.
THE INFORMATION EFFECTS OF ORIGIN ON MIGRANTS' JOB SEARCH BEHAVIOR*
Authors: Gibbs Robert M.
Published: July 2006

ABSTRACT. Migrants are generally assumed to gather specific information about the destination primarily through physical contact, or through family, friends, and acquaintances. In this paper, I propose an additional source of information: similarities between origin and destination labor markets. Data from the 1983–1987 PSID are used in a two‐stage least squares model of postmove search duration in the U.S. Rural‐to‐urban migrants (except for rural Southerners) exhibit significantly lower search duration than other groups, controlling for productivity‐related characteristics and postmove earnings. In addition, employment growth differences between origin and destination are found to be better predictors of search duration than are differences in average earnings. This research is among the first to integrate search‐theoretics and conventional migration models to explain postmove economic outcomes.
PRICE AND LOCATION CONJECTURES IN MEDIUM‐ AND LONG‐RUN SPATIAL COMPETITION MODELS*
Authors: Mulligan Gordon F. , Fik Timothy J.
Published: July 2006

ABSTRACT. This paper examines medium‐run and long‐run equilibria in unbounded (circular) and bounded (linear) one‐dimensional multifirm markets. A price‐location adjustment model is outlined that dows simulation of the spatial equilibrium when these firms anticipate reactions from their nearest spatial rivals. Thus, the market equilibrium is derived from the interdependent but atomistic decisions of the competing firms and is not imposed by some outside observer or agency. Ail conjectures are exogenous; the three well‐known price conjectures (Greenhut‐Ohta, Hotelling‐Smithies, and Losch) are highlighted; and the relevant comparative statics are provided.
COMPENSATION FOR COMMUTES IN THE LAND AND LABOR MARKETS: SOME EVIDENCE FROM THE TOKYO METROPOLITAN AREA*
Authors: Merriman David , Hellerstein Daniel
Published: July 2006

ABSTRACT. Recent research suggests that in nonmonocentric cities compensation for commutes takes the form of both lower housing prices and higher wages. This paper develops a random utility model that predicts the probability of an actor choosing to commute between each residence and job in a metropolitan area conditional on the observed location of housing units and job sites. The model allows commuting time, origin‐specific amenities, land prices, destination‐specific amenities and wages to influence actors' choices. We estimate the model using maximum likelihood and generalized least squares techniques and data on commuting between each of 38 origin and 15 destination jurisdictions in the Tokyo metropolitan area.

The empirical results show that, all else equal, a one percent increase in commuting time reduces the probability that a route (origin‐destination combination) will be chosen by almost five percent. Origin‐specific amenities are not completely capitalized into land prices and destination‐specific amenities are not completely capitalized into wages. Desirable residential amenities include school quality and a low ratio of day to night population. Desirable workplace amenities include a large share of white collar jobs and a high density of employment.
MIGRATION AND MARKET WAGE RISK*
Authors: Cooper Joyce M. Richmond
Published: July 2006

ABSTRACT. This paper departs from the human capital tradition in the migration literature by formalizing the market‐specific information contained in wages along the lines suggested by Phelps's (1969) “island parable” of search. It allows us to incorporate the role of market wage variability as a source of information in individual migration decisions. Essentially wages are assumed to vary due to two types of sources: local and national. Individuals observe their current market wage but are uncertain about the source of variation in their wage level. An integral part of the expected utility comparison that migrants make then is evaluating the information content of their current market wage; how much of it is local and how much of it is common with other markets? Given this evaluation, what can they expect of wages at alternative markets; how precise is their expectation? A linear approximation to the expected utility comparison that migrants make is used to formulate a probit specification of the move or stay decision conditional on origin market and individual characteristics. The focus here is on quantifying the effects of the origin market acting through amenities and the share of market‐specific wage variability as it affects forecasts of alternative wages and forecast precision. A subsample of employed males, not in school or in the military, from the National Longitudinal Survey of Youth (NLS) age 16 to 22 years is used for estimation. The empirical results are consistent with the theoretically predicted relationship between migration propensities and regional differences in the information content of wages. In addition, the results provide evidence that risk aversion deters migration given uncertainty, measured by forecast precision, about alternative market wage levels.
EVOLUTION OF URBAN SYSTEMS IN THE PARETO PLANE*
Authors: Roehner Bertrand Marie
Published: July 2006

ABSTRACT Distributions of city sizes are usually characterized by their Pareto index. This, however, turns out to be a rather restrictive view, for the Pareto distribution is known to become singular whenever the Pareto index becomes smaller than one, a case which is fairly frequent in empirical distributions. We show that the introduction of finite Pareto distributions in which city sizes are bounded from above solves a number of difficulties encountered by the rank‐size rule and by the unbounded Pareto distribution. Combined with the use of finite Pareto distributions, the green‐belt model that has been introduced previously is reexamined. It implies definite constraints for the long‐run evolution of urban systems; it is in the cases of countries experiencing a process of fast urbanization that these constraints are of greatest significance. The implications of the model are confronted with empirical evidence concerning the evolution of urban systems in major industrialized countries during the nineteenth and twentieth centuries.
A NOTE ON REAL WAGE RIGIDITY AND STATE UNEMPLOYMENT RATES*
Authors: Payne James E.
Published: July 2006

ABSTRACT This paper extends the research of Hyclak and Johnes (1989) in analyzing the relationship between the rigidity in real wages and state unemployment rates. It presents evidence contrary to the empirical findings of Hyclak and Johnes in that measures of real wage rigidity are not robust over time in explaining changes in state unemployment rates. Moreover, an alternative proxy accounting for divergent growth patterns across states does not significantly affect changes in state unemployment rates.