Testing the NEG Model: Further Evidence from Panel Data
Local wage variations in the UK are explained by two non-nested rival hypotheses. The first derives from new economic geography theory, in which wages depend on market potential. The second come from urban economics theory, giving a reduced form with wage rates dependent on employment density. The paper examines whether one of these rivals is encompassed by the other by fitting an artificial nesting model using three alternative panel data estimators. The estimates indicate that neither hypothesis is encompassed by its rival, suggesting a need for new, more comprehensive, theory.
|Date of creation:||Aug 2008|
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- MION, Giordano, .
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CORE Discussion Papers RP
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- Giordano Mion, 2004. "Spatial externalities and empirical analysis: the case of Italy," LSE Research Online Documents on Economics 42663, London School of Economics and Political Science, LSE Library.
- Giuseppe De Arcangelis & Giordano Mion, 2002. "Spatial Externalities and Empirical Analysis: The case of Italy," series 0006, Dipartimento di Scienze Economiche e Metodi Matematici - Università di Bari, revised Jan 2002.
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