The Market as a Factor in the Localization of Industry in the United States

An empirical analytical framework for agglomeration economies

“…Distance is measured using Pythagoras and the x and y coordinates of the ward centroid. This is essentially an accessibility based measure of agglomeration and it closely resembles the concept of market potential developed by Harris (1954) and used in recent empirical work on agglomeration by Mion (2004) and Hanson (2005).…”

Market access and regional disparities

“…More precisely, production sites with good access to major markets because of relatively low trade costs tend to reward their production factors with higher wages and land rentals. Moreover, the equation resembles the market potential concept introduced by Harris (1954). The market potential concept states that the attraction of a region as a production site depends on its access to markets.…”

“…Clark et al (1969) and Keeble et al (1982) investigate effects of European integration by analysing changes in regional accessibility and market potential induced by a reduction of tariff barriers. They use the market potential concept as proposed by Harris (1954). The analyses assume that accessibility is important for investment decisions and, therefore, regional growth.…”

“…However, following the advice by Leamer and Levinsohn (1995), we 'estimate and don't test'. What this means is, that instead of testing a specific NEG model against alternative explanations of agglomeration, a specific model as well as the so-called market potential concept by Harris (1954), consistent with different NEG models, is applied. By investigating the validity of forces emphasized by NEG in a more general manner, we are able to compare our findings with results of related studies.…”

Valuing urban accessibility and air quality in Sweden

“…The market potential may be regarded as a reduced form measure of the demand for labor in a specific city. Empirical models including this type of measure has a long history in regional economics (see Harris 1954, for an early application). The empirical relationship between the market potential and wages have only more recently been given a more solid underpinning in the so-called "new economic geography" (see, for example, Fujita et al 1999, andHanson 2005, for a structural empirical model).…”