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AbstractThis paper focuses on the spatial distribution of economic activities that serve intraregional demand. The level of local sector activities is measured by employment per inhabitant. The basic hypothesis relates to how this proportion varies systematically over space, from high values in a central business district, through low values in suburban areas, and asymptotically approaching the average regional level as the distance from the center increases. This hypothesis is examined both analytically and through simulation experiments where the location decision of firms is assumed to reflect the net effect of agglomeration economies, economies of scale and transportation costs. We further discuss to what degree the relevant hypothesis is consistent with specific assumptions on the distribution of wages (transport cost) between consumers, and the spatial distribution of the prices on goods and services. The model formulation we propose is useful as a part of economic base modeling for predicting regional development.
It is well known that measures of labour market accessibility explains spatial variation in housing prices even in markets with polycentric labour market structures. This paper examines whether data on observed commuting patterns can replace or supplement gravity-based measures representing the commuting potential at specific locations. We use data from a region in Western Norway,and we find that measures based on observed commuting flows and commuting time cannot replace a gravity-based measure of labour market accessibility. Based on, inter alia, the spatial Durbin estimator we find that measures of observed commuting flows increase the explanatory power of a hedonic house price model.
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