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Spatial Economics for Granular Settings

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  • Jonathan I. Dingel
  • Felix Tintelnot

Abstract

We examine the application of quantitative spatial models to the growing body of fine spatial data used to study economic outcomes for regions, cities, and neighborhoods. In “granular” settings where people choose from a large set of potential residence-workplace pairs, idiosyncratic choices affect equilibrium outcomes. Using both Monte Carlo simulations and event studies of neighborhood employment booms, we demonstrate that calibration procedures that equate observed shares and modeled probabilities perform very poorly in such settings. We introduce a general-equilibrium model of a granular spatial economy. Applying this model to Amazon's proposed HQ2 in New York City reveals that the project's predicted consequences for most neighborhoods are small relative to the idiosyncratic component of individual decisions in this setting. We propose a convenient approximation for researchers to quantify the “granular uncertainty” accompanying their counterfactual predictions.

Suggested Citation

  • Jonathan I. Dingel & Felix Tintelnot, 2020. "Spatial Economics for Granular Settings," NBER Working Papers 27287, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:27287
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    2. Yuhei Miyauchi & Kentaro Nakajima & Stephen J. Redding, 2021. "Consumption Access and Agglomeration: Evidence from Smartphone Data," Working Papers 287, Princeton University, Department of Economics, Center for Economic Policy Studies..
    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. 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.
    5. Stephen J. Redding, 2021. "Suburbanization in the United States 1970-2010," Working Papers 286, Princeton University, Department of Economics, Center for Economic Policy Studies..
    6. Benjamin Schoefer & Oren Ziv, 2021. "Productivity, Place, and Plants," CESifo Working Paper Series 8843, CESifo.
    7. Stephen J. Redding, 2020. "Trade and geography," CEP Discussion Papers dp1718, Centre for Economic Performance, LSE.
    8. Antràs, Pol & CHOR, HAN PING DAVIN, 2021. "Global Value Chains," CEPR Discussion Papers 15908, C.E.P.R. Discussion Papers.
    9. 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.
    10. Piyush Panigrahi, 2021. "Endogenous Spatial Production Networks: Quantitative Implications for Trade and Productivity," CESifo Working Paper Series 9466, CESifo.
    11. 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.
    12. 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).
    13. 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.
    14. 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.
    15. Andrew B. Bernard & Yuan Zi, 2022. "Sparse Production Networks," CESifo Working Paper Series 9964, CESifo.
    16. Andrew B. Bernard & Yuan Zi, 2022. "Sparse production networks," CEP Discussion Papers dp1879, Centre for Economic Performance, LSE.
    17. Johannes Buggle & Thierry Mayer & Seyhun Orcan Sakalli & Mathias Thoenig, 2022. "The Refugee's Dilemma: Evidence from Jewish Migration out of Nazi Germany," Post-Print hal-03861721, HAL.
    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

    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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