Is new economic geography right?
Subtitle: evidence from price data
By: Jessie Handbury, David E. Weinstein
Contributors: Weinstein, David E.; National Bureau of Economic Research
Series: NBER working paper series -- working paper 17067; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 17067.
Publisher: National Bureau of Economic Research
Published: 2011
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "The agglomeration force behind the New Economic Geography literature initiated by Krugman is based on the notion that larger markets should have a lower variety adjusted price index.  Despite his Nobel Prize, there have been no tests of this idea.  This paper represents the first such test.  Using a rich dataset covering 10-20 million purchases of grocery items, we find that after controlling for store and shopping effects: 1) Aggregate grocery prices are lower in larger cities; 2) Residents of larger cities have access to substantially more varieties than residents of smaller cities; and 3) These forces combine to substantially lower variety adjusted prices in large cities.  In short, Krugman was right"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 8/18/2011.

Includes bibliographical references.

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