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Spatial development and the law of one price : Evidence of convergence of land values

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  • Joseph J. Capuno

    () (School of Economics, University of the Philippines Diliman)

Abstract

Many developing countries exhibit imbalanced spatial development, but corrective policies are hampered by lack of adequate sub-regional development data. Building on the insights of the factor price equalization theorem and by applying measures of spatial autocorrelation on land values, patterns of local development and linkages in the Philippines are traced. Evidence of convergence in provincial and urban land values is found in 1986-2000, although the clustering is more local than global. Thus, greater infrastructure investments and use of land values by local governments as policy guides should be made to facilitate in-country trade and migration, and to disperse growth.

Suggested Citation

  • Joseph J. Capuno, 2010. "Spatial development and the law of one price : Evidence of convergence of land values," UP School of Economics Discussion Papers 201001, University of the Philippines School of Economics.
  • Handle: RePEc:phs:dpaper:201001
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    File URL: http://www.econ.upd.edu.ph/dp/index.php/dp/article/view/7/7
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    References listed on IDEAS

    as
    1. Case, Anne C, 1991. "Spatial Patterns in Household Demand," Econometrica, Econometric Society, vol. 59(4), pages 953-965, July.
    2. Ernesto M. Pernia & J.M. Ian S. Salas, 2005. "Investment Climate and Regional Development in the Philippines," UP School of Economics Discussion Papers 200501, University of the Philippines School of Economics.
    3. Jones, Ronald W. & Peter Neary, J., 1984. "The positive theory of international trade," Handbook of International Economics, in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 1, chapter 1, pages 1-62, Elsevier.
    4. Aten, Bettina, 1996. "Evidence of Spatial Autocorrelation in International Prices," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 42(2), pages 149-163, June.
    5. Ernesto M. Pernia & Pilipinas F. Quising, 2003. "Trade openness and regional development in a developing country," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 37(3), pages 391-406, August.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Spatial development; land values; convergence; Philippines;

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns

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