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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. Bernard, Andrew B. & Zi, Yuan, 2022. "Sparse production networks," LSE Research Online Documents on Economics 118004, London School of Economics and Political Science, LSE Library.
    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. 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.
    6. Stephen J. Redding, 2020. "Trade and Geography," NBER Working Papers 27821, National Bureau of Economic Research, Inc.
    7. 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.
    8. Pablo D. Fajgelbaum & Cecile Gaubert & Nicole Gorton & Eduardo Morales & Edouard Schaal, 2023. "Political Preferences and the Spatial Distribution of Infrastructure: Evidence from California's High-Speed Rail," NBER Working Papers 31438, National Bureau of Economic Research, Inc.
    9. 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.
    10. Redding, Stephen, 2021. "Suburbanization in the United States 1970-2010," CEPR Discussion Papers 16174, C.E.P.R. Discussion Papers.
    11. Benjamin Schoefer & Oren Ziv, 2021. "Productivity, Place, and Plants," CESifo Working Paper Series 8843, CESifo.
    12. Franklin, Simon & Imbert, Clément & Abebe, Girum & Mejia-Mantilla, Carolina, 2021. "Urban Public Works in Spatial Equilibrium: Experimental Evidence from Ethiopia," CEPR Discussion Papers 16691, C.E.P.R. Discussion Papers.
    13. Andrew B. Bernard & Yuan Zi, 2022. "Sparse Production Networks," CESifo Working Paper Series 9964, CESifo.
    14. Antrà s, Pol & Chor, Davin, 2021. "Global Value Chains," CEPR Discussion Papers 15908, C.E.P.R. Discussion Papers.
    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 P., 2019. "On the Road (Again): Commuting and Local Employment Elasticities in Germany," IZA Discussion Papers 12257, Institute of Labor Economics (IZA).
    18. Andrew B. Bernard & Yuan Zi, 2022. "Sparse production networks," CEP Discussion Papers dp1879, Centre for Economic Performance, LSE.
    19. 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).
    20. 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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