Three Essays in Spatial Economics

This work contributes to the field of spatial economics by embracing three distinct modelling approaches, belonging to different strands of the theoretical literature. In the first chapter I present a theoretical model in which the changes in urban system’s degree of functional specialisation are linked to (i) firms’ organisational choices and firms’ location decisions. The interplay between firms’ internal communication/managing costs (between headquarters and production plants) and the cost of communicating with distant business services providers leads the transition process from an “integrated” urban system where each city hosts every different functions to a “functionally specialised” urban system where each city is either a primary business center (hosting advanced business services providers, a secondary business center or a pure manufacturing city and all this city-types coexist in equilibrium.The second chapter investigates the impact of free trade on welfare in a two-country world modelled as an international Hotelling duopoly with quadratic transport costs and asymmetric countries, where a negative environmental externality is associated with the consumption of the good produced in the smaller country. Countries’ relative sizes as well as the intensity of negative environmental externality affect potential welfare gains of trade liberalisation. The third chapter focuses on the paradox, by which, contrary to theoretical predictions, empirical evidence shows that a decrease in international transport costs causes an increase in foreign direct investments (FDIs). Here we propose an explanation to this apparent puzzle by exploiting an approach which delivers a continuum of Bertrand- Nash equilibria ranging above marginal cost pricing. In our setting, two Bertrand firms, supplying a homogeneous good with a convex cost function, enter the market of a foreign country. We show that allowing for a softer price competition may indeed more than offset the standard effect generated by a decrease in trade costs, thereby restoring FDI incentives.

The Centrality of Urban Economies to the Study of Competitiveness

In recent decades the role of cities and of urban areas in the enhancement of competitiveness has become steadily more important and central to policy formation. The study of urban competitiveness is of interest, first, because it allows us to more fully understand to bases for policy and, second, because it allows us to evaluate the performance of a number of cities so as to determine what policies lead to success and what factors lead to failure or to steady decline. This research should be of interest to scholars as well as to urban practitioners.

China Urban Competitiveness in Industrialization: Based on the Panel Data of 25 Cities in China from 1990 to 2009

There is a consensus in China that industrialization, urbanization, globalization and information technology will enhance China's urban competitiveness. We have developed a methodology for the analysis of urban competitiveness that we have applied to China's 25 principal cities during three periods from 1990 through 2009. Our model uses data for 12 variables, to which we apply appropriate statistical techniques. We are able to examine the competitiveness of inland cities and those on the coast, how this has changed during the two decades of the study, the competitiveness of Mega Cities and of administrative centres, and the importance of each variable in explaining urban competitiveness and its development over time. This analysis will be of benefit to Chinese planners as they seek to enhance the competitiveness of China and its major cities in the future.

Water quality and health in a Sahelian semi-arid urban context: an integrated geographical approach in Nouakchott, Mauritania

Access to sufficient quantities of safe drinking water is a human right. Moreover, access to clean water is of public health relevance, particularly in semi-arid and Sahelian cities due to the risks of water contamination and transmission of water-borne diseases. We conducted a study in Nouakchott, the capital of Mauritania, to deepen the understanding of diarrhoeal incidence in space and time. We used an integrated geographical approach, combining socio-environmental, microbiological and epidemiological data from various sources, including spatially explicit surveys, laboratory analysis of water samples and reported diarrhoeal episodes. A geospatial technique was applied to determine the environmental and microbiological risk factors that govern diarrhoeal transmission. Statistical and cartographic analyses revealed concentration of unimproved sources of drinking water in the most densely populated areas of the city, coupled with a daily water allocation below the recommended standard of 20 l per person. Bacteriological analysis indicated that 93% of the non-piped water sources supplied at water points were contaminated with 10-80 coliform bacteria per 100 ml. Diarrhoea was the second most important disease reported at health centres, accounting for 12.8% of health care service consultations on average. Diarrhoeal episodes were concentrated in municipalities with the largest number of contaminated water sources. Environmental factors (e.g. lack of improved water sources) and bacteriological aspects (e.g. water contamination with coliform bacteria) are the main drivers explaining the spatio-temporal distribution of diarrhoea. We conclude that integrating environmental, microbiological and epidemiological variables with statistical regression models facilitates risk profiling of diarrhoeal diseases. Modes of water supply and water contamination were the main drivers of diarrhoea in this semi-arid urban context of Nouakchott, and hence require a strategy to improve water quality at the various levels of the supply chain.

Defining and measuring urban regions: A sensitivity analysis

This paper evaluates the impact of alternative city boundary definitions on economic performance. First we discuss the theoretical background and motivate the empirical work. Then we present the methodological concept of the sensitivity analysis, which will be applied to a variety of data of Zurich and Bern (the financial and the administrative centres of Switzerland) in order to see how the values of different indicators vary depending on the definition adopted. Finally we will show whether the empirical patterns found are statistically significant. The analysis shows, that the delimitation of a city or city region indeed matters.

Urban expansion and its impact on urban agriculture – remote sensing based change analysis of Kizinga and Mzinga Valley – Dar Es Salaam, Tanzania

Urban agriculture is a phenomenon that can be observed world-wide, particularly in cities of devel-oping countries. It is contributing significantly to food security and food safety and has sustained livelihood of the urban and peri-urban low income dwellers in developing countries for many years. Population increase due to rural-urban migration and natural, coupled with formal as well as infor-mal urbanization are competing with urban farming for available space and scarce water resources. A multitemporal multisensoral urban change analysis over the period of 25 years (1982-2007) was performed in order to measure and visualize the urban expansion along the Kizinga and Mzinga valley in the South of Dar es Salaam. Airphotos and VHR satellite data were analyzed by using a combination of a composition of anisotropic textural measures and spectral information. The study revealed that unplanned built-up area is expanding continuously and vegetation covers and agricultural lands decline at a fast rate. The validation showed that the overall classification accuracy varied depending on the database. The extracted built-up areas were used for visual in-terpretation mapping purposes and served as information source for another research project. The maps visualize an urban congestion and expansion of nearly 18% of the total analyzed area that had taken place in the Kizinga valley between 1982 and 2007. The same development can be ob-served in the less developed and more remote Mzinga valley between 1981 and 2002. Both areas underwent fast changes where land prices still tend to go up and an influx of people both from rural and urban areas continuously increase density with the consequence of increasing multiple land use interests.

Fostering sustainable urban development in Nakuru, Kenya Rift Valley

The town of Nakuru—Kenya's fourth largest town—lies in a unique setting in the Great Rift Valley. Recent developments on the Menengai Crater, the Mau Escarpment, and the Bahati Highlands exemplify the impacts of poorly planned urban growth on mountain ecosystems. The Nakuru Local Urban Observatory (LUO) project was initiated by the Municipal Council of Nakuru in January 2003, in collaboration with the Centre for Development and Environment (CDE) of the University of Berne and the Intermediate Technology Development Group (ITDG), and with funding from the Swiss Agency for Development and Cooperation (SDC). The project aims to provide a framework for sustainable urban development practices by building technical skills and improving participation by local stakeholders in decision-making processes. The potentials of information technology (IT) are being tapped to provide up-to-date information to decision-makers and democratize access to information, in order to improve public participation. The overall objective is to find ways of achieving better urban management in order to mitigate non-sustainable development trends in the town and its surroundings.

The Holdout Problem and Urban Sprawl

Developers attempting land assembly often face a potential holdout problem that raises the cost of development. To minimize this extra cost, developers will prefer land whose ownership is less dispersed. This creates a bias toward development at the urban fringe where average lot sizes are larger, resulting in urban sprawl. This paper examines the link between the holdout problem and urban sprawl and discusses possible remedies.

Are Shirking and Leisure Substitutable? An Empirical Test of Efficiency Wages Based on Urban Economic Theory

Recent theoretical work has examined the spatial distribution of unemployment using the efficiency wage model as the mechanism by which unemployment arises in the urban economy. This paper extends the standard efficiency wage model in order to allow for behavioral substitution between leisure time at home and effort at work. In equilibrium, residing at a location with a long commute affects the time available for leisure at home and therefore affects the trade-off between effort at work and risk of unemployment. This model implies an empirical relationship between expected commutes and labor market outcomes, which is tested using the Public Use Microdata sample of the 2000 U.S. Decennial Census. The empirical results suggest that efficiency wages operate primarily for blue collar workers, i.e. workers who tend to be in occupations that face higher levels of supervision. For this subset of workers, longer commutes imply higher levels of unemployment and higher wages, which are both consistent with shirking and leisure being substitutable.

The citizens' urban extitutional processes in Madrid

Talking about participation is always taking into account economics, capitals and resources. Who can participate? How citizens can afford time and space resources to participate? We don¿t like to speak about participation rather than collective processes of empowerment. Connecting the personal and the social, a different analysis of the relations between the public sphere and the domestic space is needed. There is an emergent new collective realm based on networks opening and distributing domestic practices within the city. These processes are developed as extitucional informal processes around the house, revealing other forms of urban and citizen assemblages in Madrid. Studies on the urban citizen organization have not developed a system to explain the different modes and processes as a movement-rhizome formed around the housing. It is the purpose of this research to explain and track how they are formed, how they operate in the city, how the action enables trading and how other non econonomical capitals are at stake in this process. The article investigates the different modes in which the creation of citizen networks not come only from public space and squares but also from finantial negociations, banks, housing and bodies. House is not any more an individual, particular and intimate space. That is the main teaching that the Mortage citizens¿ platform show us in Madrid. The empowerment citizen initiative PaH and all the citizen initiatives around the access to housing perform another urbanism as an extitutional process. Madrid is also today a collective laboratory around the house.