Engel's law, Petty's law, and agglomeration
Abstract
This paper presents a model of structural change and agglomeration. A decline in transportation costs, by enhancing consumers' purchasing power, leads to Engel's law of the demand shift from agricultural to non-agricultural goods. At the same time, the decline in transportation costs, by enlarging the extent of the market for non-agricultural goods, induces Petty's law of the labor reallocation from agriculture to non-agricultural activities. These structural transformations weaken dispersion forces given by farmers tied to the land, whereas they strengthen agglomeration forces generated by footloose non-agricultural workers. Thus, a substantial decline in transportation costs gives rise to agglomeration of non-agricultural activities.Download Info
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Bibliographic Info
Article provided by Elsevier in its journal Journal of Development Economics.
Volume (Year): 87 (2008)
Issue (Month): 1 (August)
Pages: 161-177
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Web page: http://www.elsevier.com/locate/devec
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Holger Breinlich & Alejandro Cuñat, 2012.
"Geography, Non-Homotheticity, and Industrialization: A Quantitative Analysis,"
CeFiG Working Papers
19, Center for Firms in the Global Economy, revised 01 Dec 2012.
- Holger Breinlich & Alejandro Cuñat, 2012. "Geography, Non-Homotheticity, and Industrialization: A Quantitative Analysis," CESifo Working Paper Series 3927, CESifo Group Munich.
- Hélène LATZER & Florian MAYNERIS, 2012.
"Income distribution and vertical comparative advantage Theory and evidence,"
Discussion Papers (IRES - Institut de Recherches Economiques et Sociales)
2012018, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES), revised 20 Oct 2012.
- LATZER, Hélène & MAYNERIS, Florian, 2012. "Income distribution and vertical comparative advantage. Theory and evidence," CORE Discussion Papers 2012034, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Hélène Latzer & Florian Mayneris, 2011. "Trade in quality and income distribution: an analysis of the enlarged EU market," Working Papers of BETA 2011-21, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
- Fabio Cerina & Francesco Mureddu, 2012.
"Agglomeration And Growth With Endogenous Expenditure Shares,"
Journal of Regional Science,
Wiley Blackwell, vol. 52(2), pages 324-360, 05.
- Fabio Cerina & Francesco Mureddu, 2008. "Agglomeration and Growth with Endogenous Expenditure Shares," Working Paper CRENoS 200820, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
- Pflüger, Michael & Tabuchi, Takatoshi, 2010. "The size of regions with land use for production," Regional Science and Urban Economics, Elsevier, vol. 40(6), pages 481-489, November.
- Fabio Cerina & Francesco Mureddu, 2010. "Is Agglomeration really Good for Growth? Global Efficiency, Interregional Equity and Uneven Growth," DEGIT Conference Papers c015_022, DEGIT, Dynamics, Economic Growth, and International Trade.
- Motamed, Mesbah J. & Florax, Raymond J.G.M. & Masters, William J., 2009. "Geography and Economic Transition: Global Spatial Analysis at the Grid Cell Level," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49589, Agricultural and Applied Economics Association.
- Fabio Cerina & Francesco Mureddu, 2011. "Structural Change and Growth in a NEG model," Working Paper CRENoS 201118, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
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