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Estimating the Local Productivity Spillovers from Science

Subhra Saha, Joseph Staudt () and Bruce Weinbergx

Working Papers from U.S. Census Bureau, Center for Economic Studies

Abstract: We estimate the local productivity spillovers from science by relating wages and real estate prices across metros to measures of scienti c activity in those metros. We address three fundamental challenges: (1) factor input adjustments using wages and real estate prices, along with Shepards Lemma, to estimate changes metros' productivity, which must equal changes in unit production cost; (2) unobserved differences in metros/causality using a share shift index that exploits historic variation in the mix of research in metros interacted with trends in federal funding for specific fields as an instrument; (3) unobserved differences in workers using data on the states in which people are born. Our estimates show a strong positive relationship between wages and scientifc research and a weak positive relationship for real estate prices. Overall, we estimate high rate of return to research.

JEL-codes: J3 R11 O33 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eff and nep-ure
Date: 2017-01
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Handle: RePEc:cen:wpaper:17-56