 Modelling urban development in New ZealandS. Donovan, Arthur Grimes and David Maré No 20_07, Working Papers from Motu Economic and Public Policy Research Abstract: We formulate and estimate a simple dynamic spatial general equilibrium model of urban development. Notwithstanding its simplicity, the model allows for adjustment frictions in housing markets; workers with heterogeneous productivities and preferences; and agglomeration economies in production and consumption. We estimate our model as a system of equations using panel data for workers residing in 132 urban settlements in New Zealand for the period 1976 to 2013. In terms of housing markets, we find strong evidence of increasing marginal costs and large adjustment frictions. The latter suggests demand shocks lead to temporarily elevated prices. In terms of agglomeration economies, we find New Zealand’s cities and towns offer economies of scale to producers, in the form of higher wages, but diseconomies of scale to consumers. By exploiting the panel structure of our data, we consider whether our findings are stable over time. We use the results of our model to compare relative productivity and amenity levels in New Zealand’s cities and towns and consider implications for research and policy. Keywords: urban development; location choice; dynamics; wages; rents; New Zealand (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:mtu:wpaper:20_07 Access Statistics for this paper More papers in Working Papers from Motu Economic and Public Policy Research Contact information at EDIRC. |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.