Spatial Economics for Granular Settings

Jonathan Dingel, Jonathan Dingel and Felix Tintelnot
Authors registered in the RePEc Author Service: Jonathan Ivan Dingel

No 14819, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We examine the application of quantitative spatial models to the growing body of fine spatial data used to study local economic outcomes. In granular settings in which people choose from a large set of potential residence-workplace pairs, observed outcomes in part reflect idiosyncratic choices. Using analytical examples, Monte Carlo simulations, and event studies of neighborhood employment booms, we demonstrate that calibration procedures that equate observed shares and modeled probabilities perform very poorly in these high-dimensional settings. Parsimonious specifications of spatial linkages deliver better counterfactual predictions. To quantify the uncertainty about counterfactual outcomes induced by the idiosyncratic component of individuals’ decisions, we introduce a quantitative spatial model with a finite number of individuals. Applying this model to Amazon’s proposed second headquarters in New York City reveals that its predicted consequences for most neighborhoods vary substantially across realizations of the individual idiosyncrasies.

Keywords: Commuting; Quantitative spatial economics (search for similar items in EconPapers)
JEL-codes: C25 F16 R1 R13 R23 (search for similar items in EconPapers)
Date: 2020-05
New Economics Papers: this item is included in nep-geo and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (40)

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Related works:
Working Paper: Spatial Economics for Granular Settings (2020)
Working Paper: Spatial Economics for Granular Settings (2020)
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