Cities/Regions

Patterson-Lomba, O. & Gomez-Lievano, A., 2018. On the Scaling Patterns of Infectious Disease Incidence in Cities.Abstract
Urban areas with larger and more connected populations offer an auspicious environment for contagion processes such as the spread of pathogens. Empirical evidence reveals a systematic increase in the rates of certain sexually transmitted diseases (STDs) with larger urban population size. However, the main drivers of these systemic infection patterns are still not well understood, and rampant urbanization rates worldwide makes it critical to advance our understanding on this front. Using confirmed-cases data for three STDs in US metropolitan areas, we investigate the scaling patterns of infectious disease incidence in urban areas. The most salient features of these patterns are that, on average, the incidence of infectious diseases that transmit with less ease– either because of a lower inherent transmissibility or due to a less suitable environment for transmission– scale more steeply with population size, are less predictable across time and more variable across cities of similar size. These features are explained, first, using a simple mathematical model of contagion, and then through the lens of a new theory of urban scaling. These frameworks help us reveal the links between the factors that determine the transmissibility of infectious diseases and the properties of their scaling patterns across cities.
Contreras, V., et al., 2014. Expropriation risk and housing prices: Evidence from an emerging market. Journal of Business Research , 67 (5) , pp. 935-942. Publisher's VersionAbstract
This paper examines the microeconomic determinants of residential real estate prices in Caracas, Venezuela, using a private database containing 17,526 transactions from 2008 to 2009. The particular institutional characteristics of many countries in Latin America, and Venezuela in particular, where land invasions and expropriations (with only partial compensation) have been common threats to property owners, provide us with an opportunity to test the effects of these risks on housing prices using a unique database. The effect of these risks on property prices is negative and significant. To our knowledge, this is the first attempt to quantify these impacts in the Hedonic pricing literature applied to real estate. Size, the number of parking spaces, the age of the property, the incidence of crime, and the average income in the neighborhood are significant determinants of prices. Finally, this paper analyzes the microeconomic determinants of housing prices at the municipal level.
What is different about urbanization in rich and poor countries? Cities in Brazil, China, India and the United States
Chauvin, J.P., et al., 2017. What is different about urbanization in rich and poor countries? Cities in Brazil, China, India and the United States. Journal of Urban Economics , 98 (March 2017) , pp. 17-49. Publisher's VersionAbstract
Are the well-known facts about urbanization in the United States also true for the developing world? We compare American metropolitan areas with analogous geographic units in Brazil, China and India. Both Gibrat’s Law and Zipf’s Law seem to hold as well in Brazil as in the U.S., but China and India look quite different. In Brazil and China, the implications of the spatial equilibrium hypothesis, the central organizing idea of urban economics, are not rejected. The India data, however, repeatedly rejects tests inspired by the spatial equilibrium assumption. One hypothesis is that spatial equilibrium only emerges with economic development, as markets replace social relationships and as human capital spreads more widely. In all four countries there is strong evidence of agglomeration economies and human capital externalities. The correlation between density and earnings is stronger in both China and India than in the U.S., strongest in China. In India the gap between urban and rural wages is huge, but the correlation between city size and earnings is more modest. The cross-sectional relationship between area-level skills and both earnings and area-level growth are also stronger in the developing world than in the U.S. The forces that drive urban success seem similar in the rich and poor world, even if limited migration and difficult housing markets make it harder for a spatial equilibrium to develop.
Coscia, M., Cheston, T. & Hausmann, R., 2017. Institutions vs. Social Interactions in Driving Economic Convergence: Evidence from Colombia.Abstract

Are regions poor because they have bad institutions or are they poor because they are disconnected from the social channels through which technology diffuses? This paper tests institutional and technological theories of economic convergence by looking at income convergence across Colombian municipalities. We use formal employment and wage data to estimate growth of income per capita at the municipal level. In Colombia, municipalities are organized into 32 departamentos or states. We use cellphone metadata to cluster municipalities into 32 communication clusters, defined as a set of municipalities that are densely connected through phone calls. We show that these two forms of grouping municipalities are very different. We study the effect on municipal income growth of the characteristics of both the state and the communication cluster to which the municipality belongs. We find that belonging to a richer communication cluster accelerates convergence, while belonging to a richer state does not. This result is robust to controlling for state fixed effects when studying the impact of communication clusters and vice versa. The results point to the importance of social interactions rather than formal institutions in the growth process.

 

O'Clery, N., Gomez-Lievano, A. & Lora, E., 2016. The Path to Labor Formality: Urban Agglomeration and the Emergence of Complex Industries.Abstract

Labor informality, associated with low productivity and lack of access to social security services, dogs developing countries around the world. Rates of labor (in)formality, however, vary widely within countries. This paper presents a new stylized fact, namely the systematic positive relationship between the rate of labor formality and the working age population in cities. We hypothesize that this phenomenon occurs through the emergence of complex economic activities: as cities become larger, labor is allocated into increasingly complex industries as firms combine complementary capabilities derived from a more diverse pool of workers. Using data from Colombia, we use a network-based model to show that the technological proximity (derived from worker transitions between industry pairs) of current industries in a city to potential new complex industries governs the growth of the formal sector in the city. The mechanism proposed has robust strong predictive power, and fares better than alternative explanations of (in)formality.

O'Clery, N. & Lora, E., 2016. City Size, Distance and Formal Employment.Abstract

Cities thrive through the diversity of their occupants because the availability of complementary skills enables firms in the formal sector to grow, delivering increasingly sophisticated products and services. The appearance of new industries is path dependent in that new economic activities build on existing strengths, leading cities to both diversify and specialize in distinct areas. Hence, the location of necessary capabilities, and in particular the distance between firms and people with the skills they need, is key to the success of urban agglomerations. Using data for Colombia, this paper assesses the extent to which cities benefit from skills and capabilities available in their surrounding catchment areas. Without assuming a prioria a definition for cities, we sequentially agglomerate the 96 urban municipalities larger than 50,000 people based on commuting time. We show that a level of agglomeration equivalent to between 45 and 75 minutes of commuting time, corresponding to between 62 and 43 cities, maximizes the impact that the availability of skills has on the ability of agglomerations to generate formal employment. Smaller urban municipalities stand to gain more in the process of agglomeration. A range of policy implications are discussed.

Gomez-Lievano, A., Patterson-Lomba, O. & Hausmann, R., 2016. Explaining the Prevalence, Scaling and Variance of Urban Phenomena.Abstract

The prevalence of many urban phenomena changes systematically with population size1. We propose a theory that unifies models of economic complexity2, 3 and cultural evolution4 to derive urban scaling. The theory accounts for the difference in scaling exponents and average prevalence across phenomena, as well as the difference in the variance within phenomena across cities of similar size. The central ideas are that a number of necessary complementary factors must be simultaneously present for a phenomenon to occur, and that the diversity of factors is logarithmically related to population size. The model reveals that phenomena that require more factors will be less prevalent, scale more superlinearly and show larger variance across cities of similar size. The theory applies to data on education, employment, innovation, disease and crime, and it entails the ability to predict the prevalence of a phenomenon across cities, given information about the prevalence in a single city.

This paper is published in the journal, Nature: Human Behavior.

Explaining the prevalence, scaling and variance of urban phenomena
Gomez-Lievano, A., Patterson-Lomba, O. & Hausmann, R., 2016. Explaining the prevalence, scaling and variance of urban phenomena. Nature Human Behavior. Publisher's VersionAbstract

The prevalence of many urban phenomena changes systematically with population size1 . We propose a theory that unifies models of economic complexity2,3 and cultural evolution4 to derive urban scaling. The theory accounts for the difference in scaling exponents and average prevalence across phenomena, as well as the difference in the variance within phenomena across cities of similar size. The central ideas are that a number of necessary complementary factors must be simultaneously present for a phenomenon to occur, and that the diversity of factors is logarithmically related to population size. The model reveals that phenomena that require more factors will be less prevalent, scale more superlinearly and show larger variance across cities of similar size. The theory applies to data on education, employment, innovation, disease and crime, and it entails the ability to predict the prevalence of a phenomenon across cities, given information about the prevalence in a single city.

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Coscia, M., Hausmann, R. & Neffke, F., 2016. Exploring the Uncharted Export: An Analysis of Tourism-Related Foreign Expenditure with International Spend Data.Abstract

Tourism is one of the most important economic activities in the world: for many countries it represents the single largest product in their export basket. However, it is a product difficult to chart: "exporters" of tourism do not ship it abroad, but they welcome importers inside the country. Current research uses social accounting matrices and general equilibrium models, but the standard industry classifications they use make it hard to identify which domestic industries cater to foreign visitors. In this paper, we make use of open source data and of anonymized and aggregated transaction data giving us insights about the spend behavior of foreigners inside two countries, Colombia and the Netherlands, to inform our research. With this data, we are able to describe what constitutes the tourism sector, and to map the most attractive destinations for visitors. In particular, we find that countries might observe different geographical tourists' patterns - concentration versus decentralization -; we show the importance of distance, a country's reported wealth and cultural affinity in informing tourism; and we show the potential of combining open source data and anonymized and aggregated transaction data on foreign spend patterns in gaining insight as to the evolution of tourism from one year to another.

Gomez-Lievano, A., Tellez, J. & Lora, E., 2015. New Insights About Wage Inequality in Colombia.Abstract

This paper presents a descriptive analysis of wage inequality in Colombia by cities and industries and attempts to evaluate the impact of the inequality of industries on inequality of cities. Using the 2010-2014 Colombian Social Security data, we calculate the gini coefficient for cities and industries and draw comparisons between their distributions. Our results show that while cities are unequal in similar ways, industries differ widely on how unequal they can be with ginis. Moreover, industrial structure plays a significant role to determine city inequality. Industrial framework proves to be a key element in this area for researches and policymakers.

Campante, F. & Sole, A., 2015. Implementing Productive Development Policies in Chiapas: Institutional Framework.Abstract

This document proposes a new institutional framework for the implementation of productive development policies (PDP) in Chiapas , with the objective of promoting a structural change in the Chiapas economy in search of greater diversity and productive complexity.

The first section contains a diagnosis of the current context of PDP in the State. A low degree of implementation and execution is observed , despite the abundance of analysis, prescriptions and initiatives to support private companies. This situation cannot be attributed to the scarcity of resources. Although there are not many resources available at the state level for PDPs, there are at the level of existing federal programs. These are coordination and leadership deficiencies in the public sector , which interact with coordination problems within the private sector itself , with the perception of political-institutional instability , and with a history of mistrust, to form a scenario of little collaboration at different levels, so that many of the existing opportunities are wasted.

The second section describes the conceptual foundations for a new institutional framework that enables the effective implementation of PDP, reflected in four basic principles . First, the new framework must be built with relatively few state budget resources . Second, it is emphasized that it should focus on the coordination between the public and private sectors , which requires specific skills and knowledge within the public sector, the building of a relationship of trust , and the proactive promotion of the organization and coordination of the private sector.. Third, an emphasis on the provision of public goods and services, and not market interventions. Fourth, the promotion of a dynamic iterative process.

Once the principles have been established, the third section details the specific coordination proposal for the implementation of the new institutional framework. She focuses on the following five points. First, the designation of an implementing body on which the leadership and responsibility for the PDP implementation process clearly falls. Second, it is recommended to provide said entity with a technically competent staff. Third, it must have political autonomy. Fourth, it must be proactive, in an action-oriented dynamic process. Lastly, you must foster leadership in the private sector. At the end, illustrative examples of how the practical implementation of this dynamic process could be given are discussed.

Torres, R.C., 2012. Capital and Labor Mobility and the Size of Sub-national Governments: Evidence from a Panel of Mexican States.Abstract

We examine in this paper the relation between government size and capital and labor openness employing a panel of the 32 Mexican states over the period 1996-2006. Making use of two alternative measures of capital and labor openness and employing several alternative econometric specifications, we first find systematic positive effects of our openness measures on the size of the states’ total government spending. Thereafter, we break down total government expenditure and focus on three subcategories of spending associated with social welfare: education, health and poverty alleviation programs. We find that FDI flows, our proxy for capital openness, are not significant determinants of the state’s social spending, but labor openness, in the form of international migration, has a significant and even greater impact on some of the aforementioned categories than on total spending.

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