Agglomeration and the Price of Land: Evidence from the Prefectures / Robert Dekle, Jonathan Eaton.

Format:

Book

Author/Creator:

Dekle, Robert.

Contributor:

National Bureau of Economic Research.

Eaton, Jonathan.

Series:

Working Paper Series (National Bureau of Economic Research) no. w4781.

NBER working paper series no. w4781

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Agglomeration and the Price of Land

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1994.

Summary:

We use Japanese prefectural wage and land price data to estimate the magnitude of agglomeration effects in manufacturing and finance. We also examine the range of agglomeration effects by estimating the extent to which they diminish with distance, using a specification that encompasses the polar cases of purely local agglomeration economies, on the one hand, and national increasing returns to scale, on the other. We find that agglomeration effects are slightly stronger in financial services than in manufacturing, and that they diminish substantially with distance in either sector. Our estimates indicate that agglomeration effects can explain about 5.6 per cent of the growth in Japanese output per worker in manufacturing and about 8.9 per cent of the growth in output per worker in financial services during 1976-1988. Our estimates imply that, while the average elasticity of productivity with respect to agglomeration is between 10 and 15 per cent, agglomeration economies in the largest prefectures are nearly exhausted.

Notes:

Print version record

June 1994.