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Wages and Market Potential in Germany

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Author Info
Michael Roos

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Abstract

Using a market potential function, we examine the spatial correlation of wages and consumer purchasing power across regions in West Germany. The market potential function can be regarded as a reduced form of several new economic geography models. Thus, the estimation results provide some first evidence on the validity of these models for European regions. We find that the wage in one region is indeed positively related to purchasing power in other regions. However, this relationship only holds for skilled wokers' salaries and wages, whereas it does not for the wages of untrained workers.

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Paper provided by University of Dortmund, Department of Economics in its series Discussion Papers in Economics with number 00_09.

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Handle: RePEc:mik:wpaper:00_09

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  2. Annekatrin Niebuhr, 2006. "Market access and regional disparities," The Annals of Regional Science, Springer, vol. 40(2), pages 313-334, June. [Downloadable!] (restricted)
  3. Niebuhr, Annekatrin & Stiller, Silvia, 2002. "Integration effects in border regions - a survey of economic theory and empirical studies," ERSA conference papers ersa02p066, European Regional Science Association. [Downloadable!]
  4. Steven Brakman & Harry Garretsen, 2003. "Rethinking the "New' Geographical Economics," Regional Studies, Taylor and Francis Journals, vol. 37(6-7), pages 637-648, August. [Downloadable!] (restricted)
  5. Thijs Knaap, 2005. "Trade, Location, and Wages in the United States," Working Papers 05-30, Utrecht School of Economics. [Downloadable!]
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  6. Armando Pires, 2006. "Estimating Krugman’s Economic Geography Model for the Spanish Regions," Spanish Economic Review, Springer, vol. 8(2), pages 83-112, June. [Downloadable!] (restricted)
  7. Peter Huber & Michael Paffermayr & Yvonne Wolfmayr, 2006. "Market Potential and Border Effects in Europe," ERSA conference papers ersa06p469, European Regional Science Association. [Downloadable!]
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  8. Pierre-Philippe Combes & Henry Overman, 2003. "The Spatial Distribution of Economic Activities in the European Union," CEP Discussion Papers dp0587, Centre for Economic Performance, LSE. [Downloadable!]
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  9. Harry Garretsen & Marc Schramm & Steven Brakman, 2003. "The Spatial Distribution of Wages: Estimating the Helpman-Hanson model for Germany," Working Papers 03-08, Utrecht School of Economics. [Downloadable!]
  10. Jesús López-Rodríguez & J. Andrés Faíña, 2006. "Does distance matter for determining regional income in the European Union? An approach through the market potential concept," Applied Economics Letters, Taylor and Francis Journals, vol. 13(6), pages 385-390, May. [Downloadable!] (restricted)
  11. Michael W. M. Roos, 2006. "Regional price levels in Germany," Applied Economics, Taylor and Francis Journals, vol. 38(13), pages 1553-1566, July. [Downloadable!] (restricted)
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