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Population distribution, effective area and economic growth

Author

Listed:
  • Régis Chenavaz

    (LTCI - Laboratoire Traitement et Communication de l'Information - Télécom ParisTech - IMT - Institut Mines-Télécom [Paris] - CNRS - Centre National de la Recherche Scientifique, GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

  • Octavio Escobar

    (School of Business - Adelphi University)

Abstract

The usual measure for the factor land is the total area. But total area is a flawed measure because land is of unequal quality. To account for land quality, we use an alternative measure called effective area . Effective area is based on spatial population distribution which captures both natural conditions and human activity. Theoretically, effective area explains economic growth better than total area that biases the measure of total factor productivity (TFP) growth. Empirically on the basis of 40 years of panel data for the United States, an increase of 10% in effective area is associated with an economic growth of 5%, and the omission of effective area undervalues the growth of TFP by 8.1%.

Suggested Citation

  • Régis Chenavaz & Octavio Escobar, 2015. "Population distribution, effective area and economic growth," Post-Print hal-01457308, HAL.
    • Handle: RePEc:hal:journl:hal-01457308
    DOI: 10.1080/00036846.2015.1058907
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    References listed on IDEAS

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