Abstract
ABSTRACT This paper expands the literature on agglomeration economies in three ways. It disentangles amenity and productivity effects of agglomeration; it decomposes aggregate scale effects into agglomeration factors of interest to policy makers; and it estimates own effects and spillovers to neighbors. It proposes a spatial simultaneous equations model in a spatial equilibrium framework with three agents—workers, consumers, and producers of traded-goods and housing. Results for Ohio counties estimate economies resulting from population size, agglomeration causes, and public service quality and cost on each of the three agents in own and neighboring counties.
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