Search

Shift‐share is a popular technique used by policymakers and researchers alike to decompose the change in a variable into within and between effects, intensive and extensive margins, or other comparable effects. One reason for the popularity of shift‐share is its relative simplicity compared to econometric techniques. However, often overlooked is that a shift‐share is actually an index number problem that uses differences instead of ratios. Techniques developed in index number theory accentuate the fact that the traditional shift‐share is biased. This paper proposes using the Bennet index to achieve unbiased measurements in shift‐share decompositions. In addition to solving the bias problem, the Bennet index removes the need for a residual and may be even simpler to calculate. While this paper is primarily theoretical, it also explores the differences between the traditional shift‐share and the Bennet index—both chained and fixed base—to measure the competitive and composition effects of Canada's export performance in the United States since 1990. [ABSTRACT FROM AUTHOR]

In this paper we examine how internal migration redistributes earned income across U. S. states between 1995 and 2010. We examine interregional income flows by first describing the movement of earned income between U. S. states. Second, we examine the effect of income migration on spatial patterns of income inequality. The question we ask is, 'does migration increase or decrease convergence income across U. S. States?' A primary contribution of this paper is that instead of using only 1 year of income migration data to explore these issues, we use yearly data from the first year the Internal Revenue Service (IRS) data started including income (1995/1996) up to the most current data available (2009/2010). Results indicate that income convergence/divergence across states varies by whether or not there is general economic expansion or contraction. Nevertheless, some high-amenity states continually attract high-income households. [ABSTRACT FROM AUTHOR]

Abstract: Previous research shows that when changes in national commodity and income tax rates affect labor supply decisions differently, relative rates can be altered to increase welfare. In the U.S., 40 states impose both a sales and income tax; however, the reliance varies widely. This paper uses a computable general equilibrium model to examine tax policy changes in Colorado. The findings suggest that the revenue neutral changes to income and sales tax rates can affect both the level of economic activity and the distribution of income. When labor force participation is highly sensitive to income tax rate changes—which this paper suggests is the case—progressive changes to Colorado's tax policy changes can both reduce inequality and increase output and employment. [ABSTRACT FROM AUTHOR]

Despite economic growth since the recession, the gap between the richest and the poorest segments of the population remains one of the most pressing concerns of contemporary America. This paper uses IR-95/20, IR-80/20, and IR-65/35 ratios to measure the income divides between the richest and the poorest segments in the mid-to-large-sized metropolises of the U.S. Southeast, their variation across ethnicities, and their association with metropolitan level attributes such as diversity, segregation, socio-economic, and other built-environment, and labor characteristics. The income divide ratios serve as the dependent variables whereas principal components along with state-dummy variables serve as the explanatory variables in regressions analyses. The metropolises that are large, diverse, and better educated are the most income-divided whereas those with lower educated people are less divided. Metropolises with larger shares of their labor engaged in primary sectors of economy have higher income divides; this observation also holds true for African Americans and Hispanics. Metropolises that gained in intermixing during 2000-2014 are associated with a lower income divide and vice versa. [ABSTRACT FROM AUTHOR]

Between 1957 and 1990, nearly 100 nuclear reactors were constructed throughout the U.S., and nuclear power currently accounts for 20 percent of electricity production nationwide. Nuclear plants are often constructed in small communities for which they constitute a large source of employment and income. To date, 24 nuclear reactors have undergone decommissioning, and more are expected in the future, particularly as nuclear reactors age and face increasingly strict regulations. This paper examines the effects of nuclear decommissioning over time at the county-level on measures of employment, income, and population using difference-in-differences regression and propensity score matching. Panel data are obtained from the U.S. Census Bureau, and cover the years 1975-2014. The analysis finds that nuclear decommissioning is associated with positive and statistically significant increases in employment and per capita income over time. Results suggest that nuclear decommissioning may actually be a positive force in regional economic development, and concludes with limitations of the approach and implications for future research. As an emerging area of research, this paper is meant to build on previous work, as well as to provide a basis for further discussion and debate on the economic future of nuclear host communities and regional economies. [ABSTRACT FROM AUTHOR]

Scholars have written descriptively about the relationship between suburbanization and central city decline. However, research has not produced systematic, quantitative estimates of the relationships between the components of suburbanization and vacancy—generally or amid urban decline. Such estimates are required to design effective policies that could protect against the social inequalities associated with such development patterns. This paper applies an economic framework of suburbanization and vacancy to 99 urbanized areas in the United States to estimate the impact on central city residential vacancy from 2013 to 2019. The results support the central hypothesis, that regional over‐building contributes to central city vacancy, and that this impact is significantly magnified by the context of decline. Results show regional over‐building causes central city vacancy in Shrinking Cities at 9.6 times the effect observed in other Principal Cities. Ameliorating factors vary between Shrinking and Non‐Shrinking contexts. [ABSTRACT FROM AUTHOR]

In the last year, a central issue in regional economic growth debate has been represented by the empirical analysis of Verdoorn's law related to the long-term dynamic relationship between the rate of growth in output and the productivity growth due to increasing returns. Several papers have tested Verdoorn's law on European countries as well as many other world economies. Recently, attempts have been made to provide foundations for a spatial version of the original law specification. The main contributions were dedicated to the inclusion of spatial dependence in the economic model. Surprisingly, in the literature on Verdoom's law the analysis of the spatial heterogeneity is not often considered. The aim of this paper is the regional analysis of the spatial dependence and heterogeneity in Verdoorn's law, identifying spatial regimes that can be interpreted as clusters of productivity growth in European regions at NUTS 2 level. To pursue this objective, an optimization algorithm for the identification of groups is used. This constitutes a modified version of Simulated Annealing. [ABSTRACT FROM AUTHOR]

Recent studies have found evidence of a local employment multiplier's effect. For the most part, these studies provide an average estimate for all labor markets. In this paper, we examine how the average local employment multiplier, the effect of an exogenous increase in employment in the tradable sector on total employment, depends on the characteristics of the local labor market. Specifically, we estimate the average multipliers for coastal, noncoastal, large, and small metropolitan statistical areas (MSAs) across different time periods using the data of 333 US MSAs. Overall, we find a reduced form of local employment multiplier ranging from 1.38 to 2.24, which is within the range of typically estimated local employment multipliers. In addition, the characteristics of the local labor market matter. The local multipliers appear larger in noncoastal and large MSAs. For small and coastal metros, the multiplier is closer to 1.5 than to 2.0 while in the case of large and noncoastal metros, it is closer to 2.0 than to 1.5. The local multipliers are also sensitive to the time period considered. [ABSTRACT FROM AUTHOR]

Online shopping revenues in the United States were $520 billion 2018, a more than threefold increase over a decade prior. Recent research on county‐level shares of consumer expenditures conducted online shows aggregate consumer gains but also considerable spatial variation, creating a new source of social inequality. Through the lens of classical retail location theory, this paper uses a novel approach to test the effects of marginalization, by both income and remoteness, on online shopping behavior. We find that increased shipping costs weaken demand for online goods across consumer groups. When the costs of shipping are controlled for, distance from a city most strongly motivates low‐income counties to engage in online shopping, reflecting sensitivity to cost reductions. However, variations in cost and cost/distance ratios have little effect for this group, because if shipping surcharges exist, which they almost always do at high levels, consumers in these counties will forego online shopping. Medium‐income counties are sensitive to variations in cost and cost/distance ratios. The highest‐income counties display no response to the marginal costs of remoteness. In sum, online shopping benefits consumers living in counties marginalized by either remoteness or low income but not both. [ABSTRACT FROM AUTHOR]

Policymakers across the Southern U.S. have directed considerable attention to regional economic development plans, with mixed results. Questions remain over what types of industries, firms, and/or policies can drive long-range growth. Over the past two decades, researchers have started to focus on high-growth firms (HGFs) due to their potential innovation spillovers and job creation prospects, both of which drive further economic development. Employing databases from the Inc. 500, this study explores the dynamics of HGFs within Southern and comparative contexts. The first goal of this paper is to explore Southern HGF activity in comparison with the U.S. at-large. The second is to examine the geographical characteristics of HGFs within the South, which will include an exploration of locations, industrial mix, and the factors that could encourage HGF development and agglomeration. This paper will also analyze the longer-term ownership and acquisition patterns of HGFs across the South. Are such firms remaining embedded in the South or moving elsewhere through mergers or acquisitions? The paper concludes with a discussion of the impacts of HGFs on regional economic development and moreover, whether existing policies are conducive to these firms. [ABSTRACT FROM AUTHOR]

This essay defines walkable neighborhood systems, summarizes the negative impacts of suburbia on the economy as a whole, and presents indirect pricing as a major cause of suburbia. The paper proposes several pricing reforms and green mobility as solutions based on prices that reflect full costs. Several hypotheses are presented concerning the performance of walkable neighborhood systems and the concept of an inflection point for the takeoff of non-auto modes when density within a walkable area reaches economies of scale. It proposes research on old neighborhoods as a way to quantify relationships in the absence of pricing reforms. The paper discusses building types and high rise, and how at highest densities there may be diminishing returns. While it is natural for most scholars to study dominant land uses, there is a need to understand better dense walking neighborhoods as solutions to the costs of suburbia and to enhance their functioning to show a path to a sustainable future. [ABSTRACT FROM AUTHOR]

Recent estimates that central cities are growing faster than their suburbs in the U.S. have captured the attention of both academics and the popular media. Many commentators have used these numbers to claim that internal migration trends in the U.S. have reached a turning point, in which migrants increasingly prefer urban residences to suburban locales. However, these assertions often rely on problematic definitions of city and suburb, and pay too little attention to demographic variations among migrants. This paper examines whether recent internal migrants in the U.S. are choosing closer-in destinations, drawing from microdata samples from the American Community Survey since 2005. During this period, there is an overall trend of migrants to the largest metropolitan areas in the U.S. choosing to migrate closer to the metropolitan core. However, this trend varies significantly among major demographic groups; whereas younger, single, educated, and white-collar migrants show evidence of a return to the core, migrants who are blue-collar, less-educated, older, and with families remain more suburban. In turn, this analysis suggests that overall trends of 'back to the city' migration are producing considerable divergence in the metropolitan destinations of different demographic groups. [ABSTRACT FROM AUTHOR]

In recent years, tier-two fashion countries have been making gains in the global fashion industry, with hip young brands, buzz-worthy fashion weeks and export-oriented designers. The Canadian fashion industry, on the other hand, continues to fall behind and instead has experienced recent high-profile closures of leading domestic fashion names. This paper explores why this is the case by considering a wide range of factors from a historical and institutional perspective. We argue that Canadian fashion is facing a number of systemic problems relating to wider institutional and policy weaknesses, rather than a lack of talent and know-how within the entrepreneurs and businesses in the sector. While the fashion industry is indeed global, we argue that it is in fact national and local level factors-political, economic, and cultural-that structure and constrain the Canadian fashion industry for independent designers. Through exploring the experiences of this group of actors-entrepreneurial fashion designers-in this particular context, we not only learn about Canada as an economy but also what is needed in order to develop the fashion industry more broadly. We provide a framework for analysing the range of socio-economic, historical, and political factors at the national level which affect the performance of the fashion sector and the operation of fashion designers as the entrepreneurial actors at the heart of the industry. [ABSTRACT FROM AUTHOR]

Access to the Internet is an essential determinant of innovation, which has received little attention in the literature. This paper emphasizes the role of Internet accessibility in lowering information costs and therefore boosting regional innovation activity. We construct a simple theoretical model to illustrate the positive impact of decreased discovery costs, proxied by the accessibility of the Internet, on innovation. To test this hypothesis, we exploit a county‐level data set in the U.S. and run three types of regression with and without instruments: OLS, negative binomial, and Poisson. Within each method, we employ four levels of download speeds. We find a positive relationship between the access to the Internet and the number of patents filed in that specific county. This effect is particularly strong in the case of access to download speeds of 10 Mbps. Our analysis suggests that access to the Internet lowers information disseminating costs and therefore encourages more patents filed in the county. The results also indicate that access to the Internet matters more than faster Internet speed for innovation. Policy implications for these results suggest that if there were a minimum Internet access initiative, there could potentially be a significant increase in innovation by the U.S. [ABSTRACT FROM AUTHOR]

This paper investigates whether imbalanced local sex ratios are associated with housing prices in the U.S. at the county level during the period 2000–2017, based on the hypothesis that the importance for men of advertising financial resources by spending more on housing increases in the marriage market where there is a scarcity of women. The results indicate that an increase of 0.1 in sex ratio is associated with approximately a 2% increase in housing prices, suggesting that men may allocate more resources toward mating effort by increasing their spending on housing when there is an abundance of men. There is little evidence that the positive association was greater during the housing bubble. [ABSTRACT FROM AUTHOR]

This paper examines the relationship between external knowledge sourcing and a diverse set of innovation outcomes in rural and urban establishments in the U.S. Existing studies in the broader knowledge management literature principally examine firms in a single industry, overwhelmingly rely on patent data to proxy for innovation, and cannot account for the innovations of businesses in rural American markets. By addressing these limitations using data from the 2014 Rural Establishment Innovation Survey of the USDA's Economic Research Service, this research provides novel insights into how externally acquired knowledge by American establishments may support innovation. Results of the analysis suggest that external knowledge sourcing may specifically promote product, process, and green innovation in U.S. firms. While collective results when external sources of information are divided by industry orientation fail to show that sources outside of a firm's industry play a dominant role in the innovation processes of American establishments in general, findings provide evidence for an outsized impact of these relationships within rural establishments specifically and suggest that external knowledge sourcing from extra‐industry organizations is most critical for promoting successful innovation in rural firms. Results additionally indicate that knowledge sourcing from non‐local organizations may be more important for supporting innovation in rural compared to urban markets. [ABSTRACT FROM AUTHOR]

Abstract: Using data on 48 contiguous U.S. states and a spatial econometric approach, this paper examines short‐ and long‐run effects of productive higher education and highway infrastructure spending financed by different revenue sources on state economic growth. Following the Lagrange Multiplier, Wald, and Likelihood Ratio tests, the data are found to be characterized by both spatial lag and spatial error processes, leading to the estimation of a dynamic spatial Durbin model. By decomposing results of the dynamic spatial Durbin model into short‐ and long‐run direct as well as indirect (spillover) effects, we show that accounting for spillover effects provides a more comprehensive approach to uncovering the effects of productive government spending on growth. We find that, regardless of the financing source, productive higher education and highway spending have statistically significant short‐ and long‐run direct as well as spillover effects on state income growth. [ABSTRACT FROM AUTHOR]

The aim of this paper is to examine the relationship between social capital and entrepreneurship in deprived urban neighbourhoods (DUNs). While there is a great deal of research on social capital, its usage and value in deprived areas is an under-researched topic. Drawing on survey data, it is found that social capital in the form of network ties within a DUN is linked to how entrepreneurship develops in these places. The breadth and variety of network ties that individuals are able to identify as sources of advice is related to the probability of considering an entrepreneurial career, and is even more strongly related to the conversion of entrepreneurial intentions into full engagement. If entrepreneurship is to be harnessed in DUNs a starting point is the enhancement of initiatives for developing social capital incorporating local businesses, residents, and local government agencies. [ABSTRACT FROM AUTHOR]

Prior to the precipitous drop in oil prices in 2014, the U.S. had experienced a substantial increase in oil and natural gas extraction due to technological advancements including horizontal drilling and hydraulic fracturing. This increased energy development likely created both benefits and costs, but the net effects for local residents are not well understood. This paper examines the effects of conventional and horizontal oil and natural gas drilling in Texas on subjective assessments of life-satisfaction and bad mental health days for nearby residents. Horizontal drilling has statistically significant deleterious effects on well-being, but the effects are driven by the Dallas-Fort Worth (DFW) metropolitan area, an area with both very high levels of horizontal drilling and a large urban population. [ABSTRACT FROM AUTHOR]

Abtract For much of the last century, the South was a net loser of blacks and whites to other regions. The end of this 'Great Migration' occurred around 1970. Since then, the South is the only U.S. region to gain both blacks and whites through migration in every decade. As recessions often perturb migration systems by restraining rates of movement and altering patterns, this paper explores how the Great Recession of 2007-2009 and its aftermath affected the established migration gains of native-born blacks and whites within the South. We use data from the 1990 and 2000 censuses and pooled data from American Community Survey to evaluate these changes. While the South continued to add both blacks and whites from migration during the recessionary years, key states bucked this trend. Georgia, for example, experienced a net migration gain of blacks but a net loss of whites. Florida added population in all time periods studied but lost large numbers of educated blacks and whites between 2008-2010. Texas, in contrast, added both blacks and whites from migration no matter their age or education throughout the recent recession. This economic downturn, then, has disturbed long-term migration patterns in the South. A more nuanced set of interstate movements has emerged, differentiated by age and education within race groups, which we suspect will last for some time. [ABSTRACT FROM AUTHOR]

The public sector traditionally subsidizes construction of major league sports facilities with bonds. In 2012, the city of Sacramento, California, approved a parking monetization agreement to raise cash for a new arena, thereby potentially avoiding the risks of bond financing altogether. Though the subsidy proposal ultimately fell through, the increasing popularity of parking monetization suggests that it is only a matter of time before other local governments consider the approach. This paper evaluates the use of parking monetization as a financing strategy to construct major league sports facilities. While professional stadia are the primary focus, many of the criticisms apply to large public capital projects more generally. We conclude that parking monetization is a risky facility subsidization strategy and a poor alternative to traditional bond financing. [ABSTRACT FROM AUTHOR]

This research adds to the literature on locational determinants of business survival by focusing on an establishment's proximity to fixed assets. Using longitudinal, establishment‐level data from rural counties in the Midwestern United States, we developed a hazard model to estimate the likelihood of rural businesses surviving the Great Recession and the recovery that followed (2007–2017). Two critical survival factors are of principal interest: proximity to a pre‐automobile era downtown business district and proximity to a limited‐access highway ramp. The results suggest that highway proximity enhances survival for manufacturing, transportation, and wholesaling establishments, as does own‐industry agglomeration. For food, retail, and accommodation businesses, proximity to cultural anchor institutions enhances the probability of survival but competitive effects, including downtown proximity, reduce the likelihood of survival. On its own, proximity to a downtown was not associated with higher odds of business survival. [ABSTRACT FROM AUTHOR]

We use individual‐level data from the United States Current Population Survey to examine effects of the COVID‐19 pandemic on employment losses across metropolitan area status and population size. Job losses spiked in April 2020, and partially recovered in subsequent months. Non‐metropolitan and metropolitan areas of all sizes experienced significant employment losses, but the impacts were much larger in large metropolitan areas. The COVID‐19 infection rate was initially higher in large metropolitan areas and this is a significant factor explaining the higher early employment losses in large metropolitan areas. However, higher job losses for large metropolitan areas persisted through summer and fall 2020 even after COVID‐19 infection rates became higher in less populous areas. We find evidence of persistent effects of early COVID‐19 infection rates on later employment. [ABSTRACT FROM AUTHOR]

Policy makers who wish to spur economic development in rural forests face challenges that include population decline and poverty. Protected land and natural amenities enhance the quality of life and prospects for economic development, but there is limited research on how different types of protected land or natural amenities affect the rural forest economy. We use county level variables for protected areas differentiated by access and extractive use, and natural amenities differentiated by climate, water area, and topography to explain spatial variation in labor and built space markets. Results show that temperate summers and water area increase wages and housing prices and explain more than 30 percent of the spatial differences in wages, housing price, employment density, built space percent, human capital, and local road density. Protected area decreases wages, but, if open access, increase housing prices and human capital and explain more than 20 percent of the spatial differences in human capital, built space percent, and local road density. [ABSTRACT FROM AUTHOR]

Using the PUMS files of the 2000 U.S. Census and 2005-2007 merged ACS data, we study the metropolitan destination choices made by newly arrived immigrants from seven top source countries between 2000 and 2007. Using a multinomial logit model, we find that the dispersion of new immigrant groups varies by origin, although all groups were subject to 1) the attraction of co-ethnic communities, and 2) the positive effects of labor market conditions in the destination (especially the employment growth rate). However, co-ethnic concentration is much more important than labor market conditions in the destination choice decision, particularly for the poorly educated. Conversely, there is a strong negative effect of co-ethnic concentration on highly educated new immigrants, revealing a dispersed geographical pattern of these highly educated immigrants. We also find the importance of employment share growth rate for highly educated immigrants which suggests that they are more sensitive to the upward employment structure at the destination than a specific job growth rate, and they may not be attracted by a metropolitan area with a low-quality employment structure, despite whether there was an increase in high-level jobs. [ABSTRACT FROM AUTHOR]

With the exception of Austin, metropolitan regions in Texas are not commonly included in research and analysis concerning creative economies-attention is largely focused on either the traditional capitals of creative production, New York and Los Angeles, or emerging, secondary regions such as Austin and Seattle, Washington. This article utilizes an industrial approach to examine the creative economies of the four most populous metropolitan regions of Texas-Austin, Dallas-Ft. Worth, Houston, and San Antonio-and detail their scale, scope, and change between 2005 and 2015. Results help establish the creative economies of the Dallas-Ft. Worth, Houston, and San Antonio metropolitan regions in the existing stream of creative research and discussion, offer further perspective on the dynamics and strength of the Austin region's creative economy, and provide insight into how regional creative economies emerge in rapidly urbanizing regions during the digital era. Additionally, special attention is paid to how these four creative economies transformed during the recessionary period from 2007 to 2009. Results of that attention build on prior research which points to the recession having a varied influence on creative economies depending on trends in the broader regional economies that house them. [ABSTRACT FROM AUTHOR]

ABSTRACT Day-labor hiring sites are found in more than 120 municipalities across the U.S., there is limited research examining the specific drivers that generate direct interventions into the day-labor market, nor is there any research examining the effectiveness of day-labor management policies. In what follows, I draw on examples from the San Diego Metropolitan Area (SDMA) to address this gap in policy-research. The findings demonstrate the pervasiveness of neoliberal ideology in day-labor management, from policing strategies to social service provision. In each case examined, local governments only took direct action when they believed day-labor activity threatened local commercial activity or when residents' fear of 'illegal immigrant' day-laborers made them question the state's ability to control space effectively. In each case, I also evaluate the effectiveness and cost of the management strategy. The results of this analysis clearly demonstrate that attempts to eliminate day-labor activity are costly and expensive while efforts to formalize day-labor cost less and have a higher success rate. [ABSTRACT FROM AUTHOR]

This study examines the relationship between casinos and economic growth in the U.S. Using county-level data on the 48 contiguous states from 2003 to 2012, we estimate the effect of casinos on per capita income growth and job creation. Our research procedures include examining the relationship using level-to-level panel data, and 3-year and 10-year differenced data. An instrumental variable approach is also considered to account for potential endogeneity of the casino variable. Although, the instruments are both relevant and exogenous, test results found insufficient evidence of endogeneity in our panel data models. In addition, we estimate a spatial error model (SEM) to account for the unobserved spatial characteristics that may affect economic growth in the counties but are not captured by our conventional econometric models. Our results show that casinos had a positive effect on per capita income; casino expansions exerted a small, positive effect on both per capita income growth and job growth. However, the effect of casino expansions on 10-year per capita income growth dissipated when we controlled for the spatial autocorrelation in our model. Nevertheless, the SEMs results also suggest that casino expansions continued to have a positive effect on the 2003-2012 job growth. [ABSTRACT FROM AUTHOR]

We examine the effects of individual plant and local characteristics on explaining survival of manufacturing plants over the last two recessions. We link the establishment-level Rural Manufacturing Survey to longitudinal establishment employment records (Quarterly Census of Employment and Wages) and examine establishment survival using a Cox proportional hazards model. We find that independent and smaller plants were most likely to survive this period of manufacturing decline (1996-2011) and their survival was more affected by local context than establishments which are part of a multi-plant firm. Among independent plants, we find that those in metropolitan counties had higher hazard rates despite finding access to local markets being a driver of survival. Plants located in more competitive counties had higher hazard rates. [ABSTRACT FROM AUTHOR]

This article investigates the role of universities in the economic development of American metropolitan regions during the Great Recession (2007-2009) and the growth period prior to it (2001-2007). It develops a supply-side conceptual framework on the role of universities in technology-led regional economic development. Specifically, this framework highlights three 'university products' that can be explicitly defined and measured: educational services, business services, and new knowledge or technology. The empirical test of this conceptual framework finds that the presence of universities is positively associated with regional economic performance during the Great Recession, mainly via the educational services product. Findings indicate that regions with a higher level of university science, technology, engineering, and mathematics graduates are more resilient to the economic recession. [ABSTRACT FROM AUTHOR]

This article estimates how effects of local labor demand shocks on labor market outcomes vary with the initial local unemployment rate, which has not been previously studied. The data are on 23 large U. S. metro areas from 1979 to 2011. The article finds that demand shocks to local job growth have greater effects in increasing real wages if the local economy initially has low unemployment. However, demand shocks have greater effects in reducing unemployment, and increasing labor force participation, if the local economy initially has high unemployment, although these differences are only of modest statistical significance. The estimates are based on a new econometric approach to determining the correct dynamic structure for how local labor markets respond to demand shocks. This new approach finds that demand shocks have persistent effects on labor force participation and real wages, but not on unemployment, which contradicts some previous research. [ABSTRACT FROM AUTHOR]

Proximity to wetlands and water bodies can be considered an amenity (for open space and recreation value), as well as a possible nuisance (with the potential for flooding or development restrictions), although the overall effect may be different depending on location. Studies of the impacts of wetlands and water on housing prices can also be prone to spatial autocorrelation problems arising from omitted unobservables. Mc Millen and Redfearn explain that locally weighted regressions ( LWRs) can address spatial autocorrelation. In addition to ordinary least squares ( OLS), we use LWR to control for spatial effects and analyze how proximity to water bodies and wetland areas impact real sales prices of homes in one Connecticut town in 2000-2009. With OLS regressions, proximity to wetland areas and water bodies are insignificant determinants of the real sale price of homes. When we control for spatial effects with a nonparametric (i.e., LWR) approach, the significance of the water variable is different than from OLS-while greater distance from wetlands leads to an insignificant relationship with housing price, the water distance effect becomes negative and significant. These results imply that incorporating potential spatial heterogeneity in the data is crucial for accurately estimating the direction, magnitudes, and statistical significance of the relationships between environmental variables and housing prices. [ABSTRACT FROM AUTHOR]