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The Price Effect on Spatial Structure: Revisiting the New Economic Geography Model

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  • An-Ming Wang
  • Chung-Hsin Yang

Abstract

This paper adds a factor of production, land, to the standard core-periphery model of the New Economic Geography to analyse the effect of land rent on the price index and spatial structure. The result indicates that when production of the manufacturing sector has high dependence on land, and high demand elasticity for differentiated goods, the price index of the core region is higher than that of the periphery, and that the price index could rise with a degree of agglomeration. Meanwhile, the market forces cannot generate a core-periphery structure, which indicates the significance of the price effect on spatial structure.

Suggested Citation

  • An-Ming Wang & Chung-Hsin Yang, 2013. "The Price Effect on Spatial Structure: Revisiting the New Economic Geography Model," Spatial Economic Analysis, Taylor & Francis Journals, vol. 8(4), pages 519-539, June.
    • Handle: RePEc:taf:specan:v:8:y:2013:i:4:p:519-539
    DOI: 10.1080/17421772.2013.835440
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    Cited by:

    1. Salvati, Luca & Ciommi, Maria Teresa & Serra, Pere & Chelli, Francesco M., 2019. "Exploring the spatial structure of housing prices under economic expansion and stagnation: The role of socio-demographic factors in metropolitan Rome, Italy," Land Use Policy, Elsevier, vol. 81(C), pages 143-152.
    2. An-Ming Wang, 2016. "Agglomeration and simplified housing boom," Urban Studies, Urban Studies Journal Limited, vol. 53(5), pages 936-956, April.
    3. Zheng, Wenbo, 2023. "Land supply and industrial agglomeration: Extension of the new economic geography model with land elements incorporated," Land Use Policy, Elsevier, vol. 132(C).
    4. Yiming Zhou, 2019. "Home market effect, land rent, and welfare," Asia-Pacific Journal of Regional Science, Springer, vol. 3(2), pages 561-580, June.

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