Blending Theory and Data: A Space Odyssey

Dave Donaldson

No 30276, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: B4 C1 F0 O0 R0 (search for similar items in EconPapers)
Date: 2022-07
New Economics Papers: this item is included in nep-geo and nep-ure
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Published as Dave Donaldson, 2022. "Blending Theory and Data: A Space Odyssey," Journal of Economic Perspectives, vol 36(3), pages 185-210.

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