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Blending Theory and Data: A Space Odyssey

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  • Dave Donaldson

Abstract

This article describes methods used in the field of spatial economics that combine insights from economic theory and evidence from data in order to answer counter- factual questions. I outline a general framework that emphasizes three elements: a specific question to be answered, a set of empirical relationships that can be identified from exogeneity assumptions, and a theoretical model that is used to extrapolate from such empirical relationships to the answer that is required. I then illustrate the application of these elements via a series of twelve examples drawn from the fields of international, regional, and urban economics. These applications are chosen to illustrate the various techniques that researchers use to minimize the theoretical assumptions that are needed to traverse the distance between identified empirical patterns and the questions that need to be answered.

Suggested Citation

  • Dave Donaldson, 2022. "Blending Theory and Data: A Space Odyssey," NBER Working Papers 30276, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:30276
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    Cited by:

    1. Luke Heath Milsom, 2023. "Moving OpportunityLocal Connectivity and Spatial Inequality," CEPREMAP Working Papers (Docweb) 2303, CEPREMAP.

    More about this item

    JEL classification:

    • B4 - Schools of Economic Thought and Methodology - - Economic Methodology
    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • F0 - International Economics - - General
    • O0 - Economic Development, Innovation, Technological Change, and Growth - - General
    • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General

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