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Geography and Economic Transition: Global Spatial Analysis at the Grid Cell Level

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  • Motamed, Mesbah J.
  • Florax, Raymond J.G.M.
  • Masters, William J.

Abstract

This paper addresses the timing of historical transition from rural to urban activity. In our model, rural production has constant returns and meets subsistence needs, while urban production has scale economies and meets the demands of higher-income consumers. Urbanization occurs sooner when rural or urban productivity is higher or transport costs are lower. We test the model on worldwide data that divides the earth's surface at half-degree intervals into over 60,000 cells. From an independent estimate of each cell's rural and urban population history, we identify the date at which each cell achieves various thresholds of urbanization. Controlling for country fixed effects and neighbors' urbanization using spatial techniques, we find that the date at which each cell passes each urbanization threshold is positively associated with its suitability for cultivation, having seasonal frosts, more access to navigable waterways and lower elevation. Aggregating cells into countries, an earlier urbanization date is linked to higher per capita income today.

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Bibliographic Info

Paper provided by Agricultural and Applied Economics Association in its series 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin with number 49589.

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Date of creation: 2009
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Handle: RePEc:ags:aaea09:49589

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Related research

Keywords: economic growth; economic geography; urbanization; agriculture; Community/Rural/Urban Development; Research Methods/ Statistical Methods; C21; N50; O11; O18; R1;

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  1. links for 2010-11-19
    by Jim in Our Word is Our Weapon on 2010-11-20 03:03:08
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Cited by:
  1. Margherita Bottero & Björn Wallace, 2013. "Is There a Long-Term Effect of Africa's Slave Trades?," Quaderni di storia economica (Economic History Working Papers) 30, Bank of Italy, Economic Research and International Relations Area.

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