Economics at your fingertips  

The neighborhood or the region? Reassessing the density–wage relationship using geocoded data

Johan Larsson

The Annals of Regional Science, 2014, vol. 52, issue 2, 367-384

Abstract: I analyze the effects of sub-city-level density of economic activity on wages. Using a geocoded dataset on employment and wages in the city areas of Sweden, the analysis is based on squares representing “neighborhoods” ( $$0.0625\,\hbox {km}^{2})$$ 0.0625 km 2 ) , “districts” ( $$1\,\hbox {km}^{2})$$ 1 km 2 ) , and “agglomerations” ( $$10\,\hbox {km}^{2})$$ 10 km 2 ) . The wage-density elasticity depends on spatial resolution, with the elasticity being highest in neighborhood squares, where a doubling of density is associated with wage increases of 1.2 %, or roughly the size of the elasticity for region density. Moving from a mean-density neighborhood to the densest neighborhood would on average increase wages by 9 %. The results are consistent with (i) the existence of a localized density spillover effect and (ii) quite sharp attenuation of human capital spillovers. An implication of the findings is that if the data source is not sufficiently disaggregated, analyses of the density–wage link risk understating the benefits of working in dense parts of regions, such as the central business districts. Copyright Springer-Verlag Berlin Heidelberg 2014

Keywords: J24; J31; R12 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (13) Track citations by RSS feed

Downloads: (external link) (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from

Access Statistics for this article

The Annals of Regional Science is currently edited by Martin Andersson, E. Kim and Janet E. Kohlhase

More articles in The Annals of Regional Science from Springer, Western Regional Science Association Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla ().

Page updated 2018-05-11
Handle: RePEc:spr:anresc:v:52:y:2014:i:2:p:367-384