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The Neighborhood or the Region? Untangling the density-productivity relationship using geocoded data

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  • Larsson, Johan P.

    (Centre for Entrepreneurship and Spatial Economics (CEnSE), Jönköping International Business School.)

Abstract

I analyze the effects of sub-city level density of economic activity on worker productivity. Using a geocoded dataset on employment and wages in the city areas of Sweden, the analysis is based on squares representing “neighborhoods” (0.0625 km2), “districts” (1 km2), and “agglomerations” (10 km2). The wage-density elasticity depends crucially on spatial resolution, with the elasticity being highest in neighborhood squares. The results are consistent with i) the existence of a localized density spillover effect and ii) quite sharp attenuation of human capital spillovers. An implication of the findings is that if the data source is not sufficiently disaggregated, analyses of the density-productivity link risk understating the benefits of working in dense parts of regions, such as the central business districts.

Suggested Citation

  • Larsson, Johan P., 2013. "The Neighborhood or the Region? Untangling the density-productivity relationship using geocoded data," Working Paper Series in Economics and Institutions of Innovation 318, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    • Handle: RePEc:hhs:cesisp:0318
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    Cited by:

    1. Ahlfeldt, Gabriel M. & Pietrostefani, Elisabetta, 2019. "The economic effects of density: A synthesis," Journal of Urban Economics, Elsevier, vol. 111(C), pages 93-107.
    2. Nabavi, Pardis, 2015. "Increasing Wage Gap, Spatial Structure and Market Access: Evidence from Swedish Micro Data," Working Paper Series in Economics and Institutions of Innovation 409, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    3. Özge Öner, 2017. "Retail city: the relationship between place attractiveness and accessibility to shops," Spatial Economic Analysis, Taylor & Francis Journals, vol. 12(1), pages 72-91, January.
    4. Öner, Özge, 2014. "Retail Productivity: Investigating the Influence of Market Size and Regional Hierarchy," Working Paper Series 1047, Research Institute of Industrial Economics.
    5. Martin Andersson & Johan P Larsson & Joakim Lundblad, 2015. "The Productive City Needs both - localization and urbanization economies across spatial scales in the city," ERSA conference papers ersa15p385, European Regional Science Association.
    6. Martin Andersson & Johan P. Larsson, 2022. "Mysteries of the trade? Skill-specific local agglomeration economies," Regional Studies, Taylor & Francis Journals, vol. 56(9), pages 1538-1553, September.

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    More about this item

    Keywords

    Density; productivity; spatial dependence; geo-coded data; neighborhood effects; human capital; agglomeration economies;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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