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Spatial Economics for Granular Settings

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  • Dingel, Jonathan
  • Tintelnot, Felix

Abstract

We introduce a general-equilibrium model of a "granular" spatial economy populated by a finite number of people. Our quantitative model is designed for application to the growing body of fine spatial data used to study economic outcomes for regions, cities, and neighborhoods. Conventional approaches invoking the law of large numbers are ill-suited for such empirical settings. We evaluate quantitative spatial models' out-of-sample predictions using event studies of large office openings in New York City. Our granular framework improves upon the conventional continuum-of-individuals model, which perfectly fits the pre-event data but produces predictions uncorrelated with the observed changes in commuting flows.

Suggested Citation

  • Dingel, Jonathan & Tintelnot, Felix, 2020. "Spatial Economics for Granular Settings," CEPR Discussion Papers 14819, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:14819
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    2. Redding, Stephen & Nakajima, Kentaro & Miyauchi, Yuhei, 2021. "Consumption access and agglomeration: evidence from smartphone data," LSE Research Online Documents on Economics 114353, London School of Economics and Political Science, LSE Library.
    3. Andrew B. Bernard & Yuan Zi, 2022. "Sparse Production Networks," NBER Working Papers 30496, National Bureau of Economic Research, Inc.
    4. Anna-Theresa Renner & Dieter Pennerstorfer, 2020. "Modeling inter-regional patient mobility: Does distance go far enough?," Economics working papers 2020-04, Department of Economics, Johannes Kepler University Linz, Austria.
    5. Simon Franklin & Clément Imbert & Girum Abebe & Carolina Mejia-Mantilla, 2024. "Urban Public Works in Spatial Equilibrium: Experimental Evidence from Ethiopia," American Economic Review, American Economic Association, vol. 114(5), pages 1382-1414, May.
    6. Yuhei Miyauchi & Kentaro Nakajima & Stephen J. Redding, 2021. "The Economics of Spatial Mobility: Theory and Evidence Using Smartphone Data," NBER Working Papers 28497, National Bureau of Economic Research, Inc.
    7. Stephen J. Redding, 2020. "Trade and geography," CEP Discussion Papers dp1718, Centre for Economic Performance, LSE.
    8. Stephen J. Redding, 2022. "Suburbanization in the USA, 1970–2010," Economica, London School of Economics and Political Science, vol. 89(S1), pages 110-136, June.
    9. Pablo Fajgelbaum & Cecile Gaubert & Nicole Gorton & Eduardo Morales Morales & Edouard Schaal, 2023. "Political preferences and the spatial distribution of infrastructure:evidence from California’s high-speed rail," Economics Working Papers 1866, Department of Economics and Business, Universitat Pompeu Fabra.
    10. Parkhomenko, Andrii & Delventhal, Matthew J, 2023. "Spatial Implications of Telecommuting in the United States," Institute of Transportation Studies, Working Paper Series qt97q6c2rg, Institute of Transportation Studies, UC Davis.
    11. Redding, Stephen, 2021. "Suburbanization in the United States 1970-2010," CEPR Discussion Papers 16174, C.E.P.R. Discussion Papers.
    12. Benjamin Schoefer & Oren Ziv, 2021. "Productivity, Place, and Plants," NBER Working Papers 28772, National Bureau of Economic Research, Inc.
    13. Antrà s, Pol & Chor, Davin, 2021. "Global Value Chains," CEPR Discussion Papers 15908, C.E.P.R. Discussion Papers.
    14. Kohei Takeda & Atsushi Yamagishi, 2024. "The economic dynamics of city structure: Evidence from Hiroshima's recovery," CEP Discussion Papers dp1988, Centre for Economic Performance, LSE.
    15. Rodrigo Adão & Costas Arkolakis & Federico Esposito, 2019. "General Equilibrium Effects in Space: Theory and Measurement," NBER Working Papers 25544, National Bureau of Economic Research, Inc.
    16. Piyush Panigrahi, 2021. "Endogenous Spatial Production Networks: Quantitative Implications for Trade and Productivity," CESifo Working Paper Series 9466, CESifo.
    17. Krebs, Oliver & Pflüger, Michael, 2023. "On the road (again): Commuting and local employment elasticities in Germany," Regional Science and Urban Economics, Elsevier, vol. 99(C).
    18. Piyush Panigrahi, 2021. "Endogenous Spatial Production Networks: Quantitative Implications for Trade & Productivity," Cowles Foundation Discussion Papers 2314, Cowles Foundation for Research in Economics, Yale University.

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    More about this item

    Keywords

    Commuting; Granularity; Gravity equation; Quantitative spatial economics;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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