Determinants of Spatial Weights in Spatial Wage Equations: A Sensitivity Analysis within a Consistent FrameworkGabriel M. Ahlfeldt and Arne Feddersen () No 22, Working Papers from Chair for Economic Policy, University of Hamburg Abstract: Recent empirical tests for a spatial wage structure have confirmed regional accessibility to be a significant determinant for income, although estimates vary considerably with respect to the geographic scope of estimated demand linkages. Our study is the first to estimate spatial demand linkages for a set of more than 1,300 European NUTS 3 regions (U.S. county equivalent) based on effective road travel times. We conduct a series of more than 200 estimations on the basis of the Harris Market Potential Equation in order to evaluate the estimates’ sensitivity to various model alterations in a meta-analysis. In line with the distinct spatial interactions captured at different levels of aggregation, our estimates reveal lower average travel costs when data aggregated to larger geographic units are used. The largest sensitivity, however, is found for sample restrictions to a limited geographic coverage, which is likely to account for the inconsistent results available in the literature. Keywords: Market Potential; Nominal Wage Equation; New Economic Geography; Sensitivity Analysis (search for similar items in EconPapers) Published in Hamburg Contemporary Economic Discussions, Issue 22, 2008 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: http://EconPapers.repec.org/RePEc:hce:wpaper:022 Access Statistics for this paper More papers in Working Papers from Chair for Economic Policy, University of Hamburg |
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