Natural Gas Industry B

Ando A., Meng B.

In spatial computable general equilibrium models, interregional trade ought to play an important role in determining the spatial price equilibrium. Although the Armington assumption is commonly employed to describe cross‐hauling, many of the existing models do not explicitly consider the behavior of transport firms. This paper presents a framework that is compatible with the Armington assumption and explicitly considers transport activities. In the model, the trade coefficient takes the form of a potential function, and the equilibrium market price becomes similar to the price index in the context of new economic geography. The features of the model are investigated by using the minimal setting, which comprises two nontransport sectors and three regions. Because transport costs are given exogenously, the commodity prices are determined relative to them. The model can be described as a system of homogeneous equations, where an output in one region can arbitrarily be determined similarly as a price in the Walrasian equilibrium.

Ferreira L.O., Serrano A.L., Revelli F.

Fujita M., Hamaguchi N.

This paper presents a general equilibrium model of new economic geography, incorporating brand agriculture that produces differentiated agricultural products. Focusing on the core-periphery space, we show that highly differentiated brand agriculture can be sustained in the periphery even when access to the core market is not particularly good. This result supports the promotion of innovative products in rural areas in order to avoid direct price competition in generic commodities markets under unfavorable conditions.

Parr J.B.

Taima M., Asami Y.

In this study, we focus on migration from metropolitan to outside areas in Japan, and quantitatively examine the personal and regional determinants of this process. At the regional level, our results show that the determinants of migration differ depending upon whether migration occurs from smaller to larger cities or vice versa. In the case of migration from larger to smaller cities, the residential environment beyond the metropolitan area is more important than employment opportunities. At the personal level, we analyzed the differences among the determinants of migration, looking at migrants according to age categories and based on their motivations for migrating. The main factors encouraging migration comprised opportunities for employment, education, and marriage.

Kawasaki A., Naito T.

Dreger C., Kosfeld R., Zhang Y.

Minimum wages may be an important instrument to reduce income inequality in a society and to promote socially inclusive economic growth. While higher minimum wages can support the Chinese transformation towards consumption driven growth, they can worsen the price competitiveness in export markets. As they differ throughout the country, this paper investigates their determinants at the regional level. In addition to a broad set of economic determinants, such as per capita income and consumption, consumer prices, unemployment and industrial structures, spatial effects are taken into account. They might arise for different reasons, including competition of local policymakers. The results show that the impact of economic variables declines, once spatial spillovers are considered. Although the minimum wage regulation pursues the relevance of economic factors in the determination of the appropriate levels, the actual development is largely driven by regional dependencies. As minimum wage standards set by local officials do not fully reflect the regional economic development, further reforms should be on the agenda.

Misdawita, Hartono D., Nugroho A.

Peralta D., Kim M.

This paper examines the dynamic interrelationship between the presence of big‐box retailers and retail employment and wages in the United States at county level for 1986–2005 using panel vector autoregressions (Panel VAR). The Panel VAR approach addresses endogenous interactions among the variables in the system. In other words, this approach takes into account the fact that the presence of big‐box retailers can have an impact on retail employment and wages and at the same time, retail employment and wages can influence the presence of big‐box retailers. Results indicate that the presence of big‐box retailers has a positive effect on employment but a negative effect on wages. The effect on wages is relatively greater and is more prolonged than the effect on employment. Both employment and wages have an instant (first year) positive effect on the presence of big‐box retailers, which implies that big‐box stores are located in areas where the economy is growing.

Elamin N., Fukushige M.

Giffoni F., Gomellini M., Pellegrino D.

Over the last decades of the XX century, human capital has emerged as a critical source of agglomeration economies fueling urban growth in advanced economies. Focusing on the Italian case, this paper assesses the contribution of human capital to urban growth, the latter gauged by employment growth between 1981 and 2001. A 10% higher share of college‐educated residents prompted a higher growth in employment in the 0.5–2.2% range. These results hold controlling for a wide set of urban characteristics and using an instrumental variable approach. By exploiting a spatial localization model, we disentangle the estimated effect into two components related to higher productivity and to higher life quality, respectively. We found that the former contributed to more than 60% of the effect at municipal level, and to over 90% at the wider local labor market level.

Aiura H.

Abbay A.G., Rutten R.P., Graaf P.M.

This paper uses spatial economic data from the northern part of Ethiopia to investigate the cost minimizing capacity of social networking, which has not been sufficiently explored from a spatial perspective. Following identification of the domains of transaction costs that could be minimized, a propensity score matching technique is applied to estimate the effects of rural households’ participation in social networking for minimizing such costs. While framing the analysis from the perspective of rural households’ spatial proximity to a small town, the paper hypothesizes active participation in social networking as a mechanism for reducing transaction costs. It is evident from the results that active participation in social networking is a significant factor for minimizing the transaction costs incurred by households who live in relatively rural hinterlands. This confers an alternative option for rural people to improve their livelihoods in cases where geographical proximity to towns offers no advantage.

Kato M.

This study investigates the determinants of the lower employment rate of married female graduates in the metropolitan areas (MAs) of Japan compared to the rate in non‐MAs using Employment Status Survey data from 1992, 1997, and 2002. The results show that the type of employment available in non‐MAs is more conducive to employment tenure. During the study period, married female graduates attained longer employment in full‐time specialized and technical jobs, such as teaching, in non‐MAs. In MAs, a larger proportion of married female graduates worked in clerical jobs, sales, or in specialized and technical jobs (e.g. doctors or uncategorized jobs), which have lower job continuity than teaching jobs. This study concludes, therefore, that employment composition is at least one of the determinants of the lower employment rate of married female graduates in MAs.

Ghosh S., Mandal B., Gupta K.

In this paper, we construct a three‐sector general equilibrium model of a small open economy with an informal sector and examine the impact of a less protectionist policy on output levels, factor prices, and the level of urban employment. We show that the urban unemployment rate has reduced with the contraction of an import‐competing manufacturing sector consequent upon tariff reductions. The informal intermediate sector has contracted as well. A possibility to expand the exportable agricultural sector exists, with an increased wage rate. Our analysis is then extended to introduce foreign capital inflow and examine the output effects and the level of unemployment. Interestingly, in the extended model, urban unemployment is aggravated as a result of an inflow of foreign capital.