This study investigated the impacts of increasing the prices of heavily protected food commodities in Indonesia on producer and consumer prices. It also evaluated the changes in household living expenses and poverty. The Indonesian Food Social Accounting Matrix was developed along with a price multiplier matrix–microsimulation approach that was used to analyze problems. Poor rural households were the most negatively affected by the increments in food prices. This result contrasted with the standard political argument stating that high rice prices will decrease poverty, particularly in rural areas where the poor live or work as farmers. Of all the food commodities observed, the changes in the rice prices had the most substantial impact on both producer and consumers price, as well as the households’ living cost, particularly low‐income households. Therefore, an increase of 25% in rice price will raise urban, rural, and national poverty levels by 0.13%, 0.10%, and 0.11%, respectively.
This paper analyses the contribution of human capital, measured using the share of residents holding a college degree, to urban growth, gauged by the growth in employment, between 1981 and 2001. According to our estimates, starting with a ten per cent higher share of college-educated residents was associated with a higher growth in employment in the 0.5-2.2 per cent range. These results hold when considering both the municipal and the local labour market (LLM) levels, and they are robust to a wide set of urban characteristics. Our findings are confirmed using a measure of education dating back to 1931 as an instrument for human capital. Furthermore, we exploit a spatial localization model with human capital premiums to disentangle the estimated effect into two components related to productivity and life quality respectively. We find that productivity contributed to more than 60 per cent of the effect of human capital on urban growth at municipal level, and to over 90 per cent at the wider LLM level.
In the analysis of center populations at both the national and regional levels considerable use has been made of the rank‐size distribution. Within the extensive literature on this distribution, however, there are a number areas that are unclear, neglected, or misleading. Consideration is initially given to the form of the rank‐size distribution and to the manner in which it is related to other distributions, notably the Pareto and the lognormal. Attention is also focused on the application of the rank‐size distribution to data on center size and on the difficulties that arise in this connection, including the problem of establishing rank‐size regularity. The discussion concludes by taking issue with the contention that the rank‐size distribution is of relevance in the design and formulation of urban policy.
The objective of the present study is to verify the flypaper effect of 476 Brazilian municipalities from 2005 to 2012, considering the new variables as instruments of grants. Political alignment, alignment of the party, and coalition of the mayor with the federal president and of the state governor were considered as instruments of grants. A municipal tax autonomy index was considered as a control variable, which represents the percentage of local taxes in the municipal total revenues. The results allow concluding that the flypaper effect exists in Brazilian municipalities and is intensified by the alignment of the representatives in the same way of theoretical literature (Hamilton 1983; Hines & Thaler 1995; Inman 2008) and previous empirical studies in Brazil. Moreover, evidences of higher flypaper effect were found in municipalities with low tax autonomy.
This paper presents a general equilibrium model of new economic geography, incorporating brand agriculture that produces differentiated agricultural products. Focusing on the core‐periphery space, we show that highly differentiated brand agriculture can be sustained in the periphery even when access to the core market is not particularly good. This result supports the promotion of innovative products in rural areas in order to avoid direct price competition in generic commodities markets under unfavorable conditions.
Under the assumption that a public firm provides goods or services to two markets and that a private firm provides goods or services to one market only, this study examines whether public firms should be privatized. It also investigates how the production quantity of a private firm changes when its degree of privatization increases. We find that when the market share of a duopoly market is large (small), partial privatization (nationalization) is socially preferable. We also find that the quantity produced by the private firm does not always increase along with the degree of privatization.
In response to the Fukushima Daiichi Nuclear Power Plant's severe crisis, the Tokyo Electric Power Company planned rolling blackouts, and the Japanese government encouraged companies and residents to conserve electricity by adopting self‐restriction plans. We examine the structural changes caused by the disaster in Japan and the effects of the power blackouts and self‐restriction plans on the magnitude and pattern of load demand. The results show that the total demand decreased after the disaster and changed from weekdays to weekends and holidays. In addition, the effect of temperature on load demand changed after the disaster.
Minimum wages may be an important instrument to reduce income inequality in a society and to promote socially inclusive economic growth. While higher minimum wages can support the Chinese transformation towards consumption driven growth, they can worsen the price competitiveness in export markets. As they differ throughout the country, this paper investigates their determinants at the regional level. In addition to a broad set of economic determinants, such as per capita income and consumption, consumer prices, unemployment and industrial structures, spatial effects are taken into account. They might arise for different reasons, including competition of local policymakers. The results show that the impact of economic variables declines, once spatial spillovers are considered. Although the minimum wage regulation pursues the relevance of economic factors in the determination of the appropriate levels, the actual development is largely driven by regional dependencies. As minimum wage standards set by local officials do not fully reflect the regional economic development, further reforms should be on the agenda.
In this study, we examine the effect of cross‐border health care in terms of public health insurance. We consider its effect on healthcare quality and progressivity of financing. We use a two‐country Hotelling model in which consumers are divided into two groups: high and low innate‐talent consumers. Aiming to maximize social welfare, governments impose a progressive income tax on consumers to provide healthcare services. Assuming that a payment scheme for healthcare services is based on diagnosis‐related group pricing, which has been adapted in many countries, we obtain the following results. The promotion of cross‐border health care does not influence healthcare quality or the progressivity of financing in patient‐importing countries, but does reduce healthcare quality and influence the progressivity of financing in patient‐exporting countries.
This paper examines the dynamic interrelationship between the presence of big‐box retailers and retail employment and wages in the United States at county level for 1986–2005 using panel vector autoregressions (Panel VAR). The Panel VAR approach addresses endogenous interactions among the variables in the system. In other words, this approach takes into account the fact that the presence of big‐box retailers can have an impact on retail employment and wages and at the same time, retail employment and wages can influence the presence of big‐box retailers. Results indicate that the presence of big‐box retailers has a positive effect on employment but a negative effect on wages. The effect on wages is relatively greater and is more prolonged than the effect on employment. Both employment and wages have an instant (first year) positive effect on the presence of big‐box retailers, which implies that big‐box stores are located in areas where the economy is growing.
In this study, we focus on migration from metropolitan to outside areas in Japan, and quantitatively examine the personal and regional determinants of this process. At the regional level, our results show that the determinants of migration differ depending upon whether migration occurs from smaller to larger cities or vice versa. In the case of migration from larger to smaller cities, the residential environment beyond the metropolitan area is more important than employment opportunities. At the personal level, we analyzed the differences among the determinants of migration, looking at migrants according to age categories and based on their motivations for migrating. The main factors encouraging migration comprised opportunities for employment, education, and marriage.
In spatial computable general equilibrium models, interregional trade ought to play an important role in determining the spatial price equilibrium. Although the Armington assumption is commonly employed to describe cross‐hauling, many of the existing models do not explicitly consider the behavior of transport firms. This paper presents a framework that is compatible with the Armington assumption and explicitly considers transport activities. In the model, the trade coefficient takes the form of a potential function, and the equilibrium market price becomes similar to the price index in the context of new economic geography. The features of the model are investigated by using the minimal setting, which comprises two nontransport sectors and three regions. Because transport costs are given exogenously, the commodity prices are determined relative to them. The model can be described as a system of homogeneous equations, where an output in one region can arbitrarily be determined similarly as a price in the Walrasian equilibrium.
Recent empirical studies have shown that investigation is required to identify the determinants of industrial location on a spatially detailed scale for disaggregated regional units, such as cities or counties. The existing literature establishes the necessity for considering spatial dependence among proximal location units; however, few studies have employed this process for Japan. We empirically show the main determinants of new entries of production bases in 1,652 local municipalities in Japan from 2012 to 2015. We also address the existence of spatial dependence by adopting a spatial econometric approach, which has an impact on the location determination process. Some location determinants of neighboring municipalities, related to economic agglomeration, have a significant impact on the new entries of production bases belonging to the heavy industry, while no significant impact is observed in the light industry. Unobserved and spatially dependent determinants have a significantly positive impact on new production bases in both industries, particularly in disaster‐stricken areas.
This study investigates the determinants of the lower employment rate of married female graduates in the metropolitan areas (MAs) of Japan compared to the rate in non‐MAs using Employment Status Survey data from 1992, 1997, and 2002. The results show that the type of employment available in non‐MAs is more conducive to employment tenure. During the study period, married female graduates attained longer employment in full‐time specialized and technical jobs, such as teaching, in non‐MAs. In MAs, a larger proportion of married female graduates worked in clerical jobs, sales, or in specialized and technical jobs (e.g. doctors or uncategorized jobs), which have lower job continuity than teaching jobs. This study concludes, therefore, that employment composition is at least one of the determinants of the lower employment rate of married female graduates in MAs.
Population outflow is one of the greatest challenges faced in the areas affected by the 2011 Great East Japan Earthquake and Tsunami. This study developed a location choice model to analyze the factors underlying population migration in the disaster areas. Individual data was collected from residents who were living in disaster areas at the time of the earthquake and tsunami. The main factors of location choice behavior, suggested by the estimation result, were residential social networks, severity of damage, and greater income opportunities in new locations. The results also suggested that high income and younger age are factors of ordinary out‐migration from these areas, regardless of the occurrence of a disaster. However, residence in a municipality with a small population that offers limited employment opportunities is a particular factor that accelerates out‐migration when that area is impacted by a disaster.
The present paper investigates the impact of infrastructure on the urban population concentration of large cities (population > 0.1 million) in India. It also assesses the status of large cities according to the availability of infrastructure and the quality of public services using data from the 2001 and 2011 Census periods. The results of Borda ranking show that cities (e.g. Shimla, Mysore, Kochi, Tumkur, Mangalore, and Thiruvananthapuram) provide greater infrastructure. Ordinary least squares regression based on factor scores estimated from principal component factor analysis show that although overall climatic condition encourages population agglomeration, spatial interaction and infrastructure have a negative impact on it. Therefore, our analysis suggests that improvement of infrastructure may not increase population agglomeration (measured by size, density, and growth rate of city population) in large cities, but will substantially improve the potential contribution of the cities to national economic growth in India by improving the ease of living and facilitating business activities.
Using the 2005 and 2010 National Household Income and Expenditure Surveys, this study examines the urban and rural dimensions of the role of education in income inequality in Bangladesh. The government needs to expand the access to and the quality of primary education because a large proportion of citizens are uneducated. This would reduce not only the urban–rural educational gap but also the educational inequalities within urban and rural areas. As the income disparity between urban–rural and educational groups is small and more than 90% of overall income inequality is the result of inequalities within educational groups, the government needs to introduce policies that could reduce inequalities within such groups. In urban areas, policies to help reduce skill mismatches in the labor market are required, while non‐agricultural employment may need to be promoted to mitigate rural income inequality.
In this paper, we construct a three sector general equilibrium model of a small open economy with informal sector. The paper examines the impact of less protectionist policy on the output levels, factor prices, and the level of urban employment. Here, it has been shown that the urban unemployment rate has been lowered with the contraction of import competing manufacturing sector consequent upon a reduction in tariff. The informal intermediate sector has contracted as well. It is further shown here that there is a possibility of expansion of exportable agricultural sector with increased wage rate. The paper is then extended to introduce foreign capital inflow and examine on the output effects and the level of unemployment. Interestingly, in the extended model urban unemployment is aggravated due to an inflow of foreign capital.
This paper uses spatial economic data from the northern part of Ethiopia to investigate the cost minimizing capacity of social networking, which has not been sufficiently explored from a spatial perspective. Following identification of the domains of transaction costs that could be minimized, a propensity score matching technique is applied to estimate the effects of rural households’ participation in social networking for minimizing such costs. While framing the analysis from the perspective of rural households’ spatial proximity to a small town, the paper hypothesizes active participation in social networking as a mechanism for reducing transaction costs. It is evident from the results that active participation in social networking is a significant factor for minimizing the transaction costs incurred by households who live in relatively rural hinterlands. This confers an alternative option for rural people to improve their livelihoods in cases where geographical proximity to towns offers no advantage.
This study constructs a social accounting matrix for Nigeria for 2010. An extended multisectoral model is calibrated to analyze the backward (power) and forward (sensitivity) dispersion to identify the key industries in the economy and their importance to other industries in the economy. The study identifies financial services as one of the key industries of the Nigerian economy, highlighting its greater importance and role in boosting economic growth. Several policy options may be simulated to investigate the spillover effects in the whole economy.
