Results

Journal article

Journal of Political Economy:

The economic dynamics of city structure: evidence from Hiroshima's recovery

We provide new theory and evidence on the resilience of the internal city structure after a large shock by analyzing the atomic bombing of Hiroshima. Exploiting newly digitized data, we document that the city structure r...Read more...

CEP discussion paper

What is the public?s social welfare function?

Optimal public policy requires a social welfare function defined over individual utilities. While there is substantial research on income-based social welfare functions, no published study has directly elicited public pr...Read more...

CEP discussion paper

Counting the costs: a quantitative assessment of Brexit?s effect on UK regional economies

This paper examines the implications of the EU-UK Trade and Cooperation Agreement (TCA) using a dynamic spatial general equilibrium model. Unlike previous studies that primarily projected potential impacts of Brexit base...Read more...

Journal article

Spatial Economic Analysis:

Digital network centrality and the structure of goods trade

This paper studies how digital infrastructure is associated with the spatial structure of international trade in goods. We embed data availability into a structural gravity framework, conceptualising it as an information...Read more...

CEP discussion paper

Digital network centrality and the structure of goods trade

This paper studies how digital infrastructure is associated with the spatial structure of international trade in goods. We embed data availability into a structural gravity framework, conceptualizing it as an information...Read more...

Journal article

Transactions of the Institute of British Geographers:

Finding stars: mapping the geography of the world's scientific elites

This paper presents the first systematic city-level mapping of global scientific talent, analysing the top 200,000 star scientists across 3635 cities worldwide annually between 2019 and 2023. We use a novel Knowledge Gen...Read more...

Journal article

Regional studies:

Can more housing supply improve affordability? A subnational perspective from Portugal

We investigate the impact of housing supply on affordability in rapidly appreciating subnational markets in Portugal. Our spatial econometric model confirms a negative relation between housing stock and prices, yet predi...Read more...

CentrePiece article

Hiroshima: urban resilience after the atomic bomb

Why the city centre re-emerged from destruction....Read more...

Journal article

Economics of Education Review:

Home broadband and human capital formation

Using administrative data from England, we estimate the effect of home broadband speed on student-level value-added test scores. Our primary estimation leverages jumps in connection quality between close neighbors across...Read more...

CEP discussion paper

Citizen training and the urban waste footprint

Diverting waste away from and zero waste to landfills are sustainability policy aims of local and national governments around the world, particularly in countries with large waste footprints from rapid consumption growth...Read more...

Blog

LSE British Politics and Policy:

Rethinking public investment in Greater Manchester's regeneration

Manchester United's proposed new stadium comes with a hefty price tag, and uncertainty over who will pay for it. Aadya Bahl argues that public funding for such projects might compete with Greater Manchester's broader eco...Read more...

Journal article

The Economic Journal:

Employer screening and optimal unemployment insurance

Field experiments show that employers are less likely to consider long-term unemployed job-seekers for interviews. We study the implications for optimal unemployment insurance (UI). Based on a structural model of job sea...Read more...

CEP discussion paper

Location choice when the number of jobs matters: matching in spatial equilibrium

The idea that people want to go to where the jobs are is intuitive yet is absent from the standard quantitative spatial modelling approach in which location choices are guided by prices, without reference to quantities (...Read more...

CEP discussion paper

Evaluating transport improvements in spatial equilibrium

The recent development of quantitative urban models provides a new set of tools for evaluating transport improvements. Conventional cost-benefit analyses are typically undertaken in partial equilibrium. In contrast, quan...Read more...

CEP discussion paper

Roads to development? Urbanization without growth in Zambia

This study explores the impacts of road improvements in a country characterized by "urbanization without growth". Our analysis reveals that, although road upgrades increase population growth, they do not significantly ad...Read more...

CEP discussion paper

Measuring quality of life under spatial frictions

Using a quantitative spatial model as a data-generating process, we explore how spatial frictions affect the measurement of quality of life. We find that under a canonical parameterization, mobility frictions - generated...Read more...

Journal article

The Economic Journal:

Globalization and conflicts: the good, the bad, and the ugly of corporations in Africa

Using a novel georeferenced datataset on the affiliates and headquarters of multinational enterprises between 2007 and 2018 together with georeferenced conflict data for the African continent, this work establishes a cau...Read more...

CEP discussion paper

Spatial economics

This paper reviews recent research in spatial economics. The field of spatial economics is concerned with the determinants and effects of the location of economic activity in geographic space. It analyses how geographica...Read more...

Journal article

The Review of Economics and Statistics:

Reservation wages and the wage flexibility puzzle

Using micro data for the UK and Germany, we provide novel evidence on the cyclical properties of reservation wages and estimate that wages and reservation wages are characterised by moderate and very similar degrees of c...Read more...

CEP discussion paper

Trade and the end of antiquity

What caused the end of antiquity, the shift of economic activity away from the Mediterranean towards northern Europe? We assemble a large database of coin flows between the 4th and 10th century and use it to document the...Read more...

Chapter

Happiness and spatial inequality: past, present, and future

in Encyclopedia of Happiness, Quality of Life and Subjective Wellbeing

Why are people happier in certain places as opposed to others? Understanding why people choose to live in a certain area, the elements they take into account when making this decision, and the value that they place on ea...Read more...

Journal article

Review of World Economics:

Curse or blessing? multinational corporations and labor market outcomes in Africa

Do multinational enterprises create local job opportunities in developing countries? We address this question in the context of Sub-Saharan Africa by combining information on domestic and foreign multinationals? affiliat...Read more...

Journal article

Oxford Open Economics:

Spatial disparities across labour markets

We consider disparities across local labour markets in Great Britain. Disparities in wages and employment rates are large and persistent, although smaller than 20 years ago. These disparities largely reflect the concentr...Read more...

CEP discussion paper

Putting quantitative models to the test: an application to Trump's trade war

The primary motivation behind quantitative modeling in international trade and many other fields is to shed light on the economic consequences of policy changes. To help assess and potentially strengthen the credibility ...Read more...

Journal article

AEA Papers and Proceedings :

Negative weights are no concern in design-based specifications

Recent work shows that popular partially linear regression specifications can put negative weights on some treatment effects, potentially producing incorrectly signed estimands. We show that this is not an issue in desig...Read more...

CEP discussion paper

Fantastic beasts and where to find them

Fantastic beasts are magical creatures that cannot be seen unless one looks for them with the eye of the wizard, but that still play a significant role in the world. The fantastic beasts we hunt and find in the present p...Read more...

CEP discussion paper

The economic dynamics of city structure: evidence from Hiroshima's recovery

We provide new theory and evidence on the resilience of the internal city structure after a large shock by analyzing the atomic bombing of Hiroshima. Exploiting newly digitized data, we document that the city structure r...Read more...

CEP discussion paper

Neighborhood effects: evidence from wartime destruction in London

We use the German bombing of London during the Second World War as an exogenous source of variation to provide evidence on neighborhood effects. We construct a newly-digitized dataset at the level of individual buildings...Read more...

Journal article

The Review of Economic Studies:

Using disasters to estimate the impact of uncertainty

Uncertainty rises in recessions and falls in booms. But what is the causal relationship? We construct cross-country panel data on stock market returns to proxy for first- and second-moment shocks and instrument these wit...Read more...

CEP discussion paper

Endogenous mobility in pandemics: theory and evidence from the United States

We study infectious diseases in a spatial epidemiology model with forward-looking individuals who weigh disease environments against economic opportunities when moving across regions. This endogenous mobility allows regi...Read more...

CEP discussion paper

Home broadband and human capital formation

Using administrative data, we estimate the effect of home broadband speed on student-level value-added test scores. Our headline estimate relies on jumps in connection quality between close neighbours that occur across t...Read more...

CEP Insights

Insights: condensed

The Insights series is an introduction to the work of the Centre for Economic Performance (CEP). Each Insight highlights the contribution of CEP researchers to both academic understanding and policymaking in one area of ...Read more...

CEP discussion paper

The social footprint of globalization: towards the introduction of strategic industries in quantitative trade models

We argue that our understanding of industrial policy in the presence of 'strategic' industries that exert positive externalities on the national economy may benefit from an extension of quantitative general equilibrium t...Read more...

Journal article

Spatial Economic Analysis:

The social footprint of globalisation: towards the introduction of strategic industries in quantitative trade models

We argue that our understanding of industrial policy in the presence of `strategic? industries that exert positive externalities on the national economy may benefit from an extension of quantitative general equilibrium t...Read more...

Blog

Vox EU:

New evidence on spatial wage inequality across North America and Western Europe

Spatial inequality has become a key policy concern across much of the advanced world, prompting a spate of government action on the issue in recent years. This column presents evidence showing that, contrary to the popul...Read more...

Blog

What Works Centre for Local Economic Growth:

What are spatial disparities?

Henry Overman explains what spatial disparities are, why we need to consider them when thinking about local economic growth policies and whether we should try to reduce them....Read more...

Blog

Centre for Cities City Talks:

City talks: what are the signs that the UK is levelling up? (Podcast)

Henry Overman speaks to Chief Executive Andrew Carter about how to measure the scale of the underperformance of cities in the UK and search for evidence that could point us towards the right solutions, in this podcast ep...Read more...

Journal article

Econometrica:

Dynamic spatial general equilibrium

We incorporate forward-looking capital accumulation into a dynamic discrete choice model of migration. We characterize the steady-state equilibrium; generalize existing dynamic exact-hat algebra techniques to incorporate...Read more...

CEP discussion paper

Robot adoption, worker-firm sorting and wage inequality: evidence from administrative panel data

Leveraging the geographic dimension of a large administrative panel on employer-employee contracts, we study the impact of robot adoption on wage inequality through changes in worker-firm assortativity. Using recently de...Read more...

CEP discussion paper

Do role models matter in large classes? New evidence on gender match effects in higher education

We study whether female students benefit from being taught by female professors, and whether such gender match effects differ by class size. We use administrative records of a German public university, covering all progr...Read more...

Journal article

Regional Science and Urban Economics :

Micro-geographic property price and rent indices

We develop a programming algorithm that predicts a balanced-panel mix-adjusted house price index for arbitrary spatial units from repeated cross-sections of geocoded micro data. The algorithm combines parametric and non-...Read more...

Journal article

Political Behaviour:

Does the number of candidates increase turnout? Causal evidence from two-round elections

A long-lasting question in comparative politics is whether the number of candidates/parties increases turnout. Existing observational studies on the topic find mixed results. We thus apply a regression discontinuity desi...Read more...

CEP discussion paper

Endogenous cross-region human mobility and pandemics

We study infectious diseases using a Susceptible-Infected-Recovered-Deceased model with endogenous cross-region human mobility. Individuals weigh the risk of infection against economic opportunities when moving across re...Read more...

Journal article

American Economic Journal: Applied Economics:

Neighbors' effects on university enrollment

This paper provides causal evidence that close neighbors signigicantly influence potential applicants' decision to attend university. I create a unique dataset combining detailed geographic information and individual edu...Read more...

Blog

Economics Observatory:

What would it take to level up the UK?

The government's levelling up agenda seeks to reduce disparities across the UK. Policies to boost economic performance will need to attract workers and firms away from London and the South East and improve opportunities ...Read more...

Journal article

Regional Science and Urban Economics:

What future for history dependence in spatial economics?

History (sometimes) matters for the location and sizes of cities and neighborhood segregation patterns within cities. Together with evidence on rapid neighborhood change and self-fulfilling expectations, this implies tha...Read more...

Journal article

Land Economics:

Urban land use fragmentation and human wellbeing

We study how land use fragmentation affects the life satisfaction of city dwellers. To this end, we calculate fragmentation metrics based on exact geographical coordinates of land use from the European Urban Atlas and of...Read more...

Journal article

International Economic Review:

Estimating border effects: the impact of spatial aggregation

Trade data are typically aggregated across space. In this article, we investigate the sensitivity of gravity estimation to spatial aggregation. We build a model in which micro regions are aggregated into macro regions. W...Read more...

CEP Insights

Cities and regions

Economic prosperity is very unevenly distributed across space. What causes some places to be richer and some poorer? Why do these spatial disparities matter - and what can policy do to reduce them? Economists studying ur...Read more...

CEP discussion paper

Dynamic spatial general equilibrium

We develop a dynamic spatial general equilibrium model with forward-looking investment and migration decisions. We characterize analytically the transition path of the spatial distribution of economic activity in respons...Read more...

CEP discussion paper

Sequential exporting across countries and products

How do exporters expand their product scope and geographical presence? We argue that new exporters are uncertain about their profitability in different countries and products, but learn it as they start to export. As a c...Read more...

CEP discussion paper

Quantifying the externalities of renewable energy plants using wellbeing data: the case of biogas

Although there is strong support for renewable energy plants, they are often met with local resistance. We quantify the externalities of renewable energy plants using well-being data. We focus on the example of biogas, o...Read more...

CEP discussion paper

Quality of life in a dynamic spatial model

We develop a dynamic spatial model in which heterogeneous workers are imperfectly mobile and forward-looking and yet all structural fundamentals can be inverted without assuming that the economy is in a stationary spatia...Read more...

CEP discussion paper

Prime locations

We harness big data to detect prime locations - large clusters of knowledge-based tradable services - in 125 global cities and track changes in the within-city geography of prime service jobs over a century. Historically...Read more...

CEP occasional paper

Regional differences in UK transport BCRs: an empirical assessment

The UK government uses a Value for Money (VfM) framework to help allocate infrastructure expenditure. At the core of this framework is a benefit to cost ratio (BCR) that is calculated using a set of established monetised...Read more...

Journal article

Journal of Urban Economics:

Land tenure and land-use in a developing city: a quantitative spatial model applied to Kampala, Uganda

Land rights and tenure systems are an important factor behind poor housing and inefficient land-use in developing country cities. In Kampala, Uganda, four systems of land tenure coexist, allowing a detailed study of the ...Read more...

Journal article

Journal of Development Economics:

The belt and road initiative: reshaping economic geography in Central Asia?

This paper develops a computable spatial equilibrium model of Central Asia and uses it to analyze the possible effects of the Belt and Road Initiative on the economy of the region. The model captures international and su...Read more...

CentrePiece article

People, places and politics: the challenge of 'levelling up' the UK

As has been much discussed since the election, economic performance varies widely among the towns, cities and regions of the UK. Henry Overman argues that policies to address these spatial disparities should be judged on...Read more...

CEP election analysis

People, places and politics

Economic performance varies widely between the towns, cities and regions of the UK. On some measures, this variation has widened since the financial crisis. These disparities have already proved to be a key theme in the ...Read more...

Journal article

Journal of Environmental Economics and Management:

Ease vs. noise: long-run changes in the value of transport (dis)amenities

For a complete cost-benefit analysis of durable infrastructures, it is important to understand how the value of non-market goods such as transit time and environmental quality changes as incomes rise in the long-run. We ...Read more...

CentrePiece article

In brief... Big city, bright future: why birthplace matters so much

How much does where you were born influence your future earnings? Analysing data from the British Household Panel Survey, Clement Bosquet and Henry Overman reveal that, on average, someone born in London in the 1970s ear...Read more...

CEP discussion paper

Should I stay or should I go? Neighbors' effects on university enrollment

This paper investigates whether the decision to attend university depends on university enrollment of close neighbors. I create a unique dataset combining detailed geographic information and educational records from diff...Read more...

CEP discussion paper

Ease versus noise: long-run changes in the value of transport (dis)amenities

For a complete cost-benefit analysis of durable infrastructures, it is important to understand how the value of non-market goods such as transit time and environmental quality changes as incomes rise in the long-run. We ...Read more...

CEP discussion paper

Commuting, migration and local joblessness

Britain suffers from persistent spatial disparities in employment rates. This paper develops an integrated framework for analyzing two forces expected to equalize economic opportunity across areas: commuting and migratio...Read more...

Journal article

Journal of Urban Economics:

Why does birthplace matter so much?

We consider the link between birthplace and wages. Using a unique panel dataset, we estimate a raw elasticity of wages with respect to birthplace size of 4.2%, two thirds of the 6.8% raw elasticity with respect to city s...Read more...

Journal article

International Journal of Industrial Organization:

Flex cars and competition in fuel retail markets

We study how the diffusion of flex (bi-fuel) cars affected competition on ethanol and gasoline retail markets. We propose a model of price competition in which the two fuels become closer substitutes as flex cars penetra...Read more...

Journal article

Journal of International Economics:

The interconnections between services and goods trade at the firm-level

In this paper we study how international trade in goods and services interact at the firm level. Using a rich dataset on Belgian firms for the period 1995?2005, we show that: i) firms are much more likely to source servi...Read more...

Journal article

Urban Studies:

Does the law of one price hold for hedonic prices?

Hedonic prices of locational attributes in urban land markets are determined by a process of spatial arbitrage that is similar to that which underpins the law of one price. If hedonic prices deviate from their spatial eq...Read more...

CEP discussion paper

History dependence in the housing market

Using data on the universe of housing transactions in England and Wales over a twenty-year period, we document a robust pattern of history dependence in housing markets. Sale prices and selling propensities are affected ...Read more...

CEP report

Urban Capacity and Economic Output

This report was commissioned by the National Infrastructure Commission as part of the evidence base for the National Infrastructure Assessment. The views expressed and recommendations set out in this report are the autho...Read more...

Journal article

CESifo Economic Studies:

Weights to address non-parallel trends in panel difference-in-differences models

Causal inference using the difference-in-differences (DD) method relies on the untestable assumption of parallel counterfactual trends across units that are assigned to different treatments. To facilitate the application...Read more...

CentrePiece article

Brexit: the economics of international disintegration

Pro-Brexit rhetoric mixes up two distinct interpretations of what made people vote to Leave the European Union ? and they have very different policy implications. As Thomas Sampson explains, those voters wanting to recla...Read more...

Journal article

The Economic Journal:

Resetting the urban network: 117-2012

Do fixed geographic features such as coastlines and rivers determine town locations, or can historical events trap towns in unfavourable locations for centuries? We examine the effects on town locations of the collapse o...Read more...

CEP discussion paper

The interconnections between services and goods trade at the firm-level

In this paper we study how international trade in goods and services interact at the firm level. Using a rich dataset on Belgian firms during the period 1995-2005, we show that: i) firms are much more likely to source se...Read more...

Journal article

National Institute Economic Review:

Local economic effects of Brexit

This paper studies local economic impacts of the increases in trade barriers associated with Brexit. Predictions of the local impact of Brexit are presented under two different scenarios, soft and hard Brexit, which are ...Read more...

Journal article

Journal of Economic Perspectives:

Brexit: the economics of international disintegration

On June 23, 2016, the United Kingdom held a referendum on its membership in the European Union. Although most of Britain's establishment backed remaining in the European Union, 52 percent of voters disagreed and handed a...Read more...

Journal article

American Economic Review:

How local are labor markets? Evidence from a spatial job search model

This paper models the optimal search strategies of the unemployed across space to characterize local labor markets. Our methodology allows for linkages between numerous areas, while preserving tractability. We estimate t...Read more...

CEP discussion paper

Brexit: the economics of international disintegration

This paper reviews the literature on the likely economic consequences of Brexit and considers the lessons of the Brexit vote for the future of European and global integration. Brexit will make the United Kingdom poorer b...Read more...

Journal article

Annual Review of Economics:

Quantitative spatial economics

The observed uneven distribution of economic activity across space is influenced by variation in exogenous geographical characteristics and endogenous interactions between agents in goods and factor markets. Until the pa...Read more...

Journal article

American Economic Review:

Is modern technology responsible for jobless recoveries?

Since the early 1990s, recoveries from recessions in the US have been plagued by weak employment growth. We investigate whether a similar problem afflicts other developed economies, and whether technology is a culprit. W...Read more...

Journal article

Journal of Environmental Economics and Management:

Does the presence of wind turbines have negative externalities for people in their surroundings? Evidence from well-being data

Throughout the world, governments foster the deployment of wind power to mitigate negative externalities of conventional electricity generation, notably CO2 emissions. Wind turbines, however, are not free of externalitie...Read more...

Journal article

American Economic Review:

A structural model of the retail market for illicit drugs

We estimate a model of illicit drugs markets using data on purchases of crack cocaine. Buyers are searching for high-quality drugs, but they determine drugs' quality (i.e., their purity) only after consuming them. Hence,...Read more...

CEP discussion paper

Quantitative spatial economics

The observed uneven distribution of economic activity across space is influenced by variation in exogenous geographical characteristics and endogenous interactions between agents in goods and factor markets. Until recent...Read more...

CentrePiece article

In brief... Investing in roads

Between 1990 and 2010, China constructed an extensive modern road network, including a national system of limited access highways. Vernon Henderson and colleagues investigate the impact on the growth of Chinese cities an...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Highways, Market Access and Urban Growth in China

We investigate the effects of the construction of the national highway system in China on local economic outcomes. The analysis employs three main approaches. The first is based on a structural model of Ricardian trade t...Read more...

Journal article

The Journal of Industrial Economics:

Spillovers in space: does geography matter?

Using U.S. firm level panel data we simultaneously assess the contributions to productivity of three potential sources of research and development spillovers: geographic, technological, and product market ("horizontal")....Read more...

SERC/Urban and Spatial Programme Discussion Paper

Location, Search Costs and Youth Unemployment: Experimental Evidence from Transport Subsidies in Addis Ababa

Do high search costs affect the labour market outcomes of job seekers living far away from jobs? I randomly assign transport subsidies to unemployed youth in urban Ethiopia. Treated respondents increase job search intens...Read more...

CEP discussion paper

Estimating border effects: the impact of spatial aggregation

Trade data are typically reported at the level of regions or countries and are therefore aggregates across space. In this paper, we investigate the sensitivity of standard gravity estimation to spatial aggregation. We bu...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Quantitative Easing of an International Financial Centre: How Central London Came So Well Out of the Post-2007 Crisis

This paper documents and seeks to explain the remarkably positive employment trends of a central area of London in the years since the onset of the financial crisis. The volatility of this economy since the 1980s had sug...Read more...

CEP discussion paper

Where does the wind blow? Green preferences and spatial misallocation in renewable energy sector

Are "greener" investments less efficient? This paper looks at the location choices by wind power investors. I measures the efficiency loss in this sector due to wrong project location and explore the factors contributing...Read more...

CEP discussion paper

Reservation wages and the wage flexibility puzzle

Wages are only mildly cyclical, implying that shocks to labour demand have a larger short-run impact on unemployment rather than wages, at odds with the quantitative predictions of the canonical search model ? even if wa...Read more...

Journal article

Research Policy:

Do inventors talk to strangers? On proximity and collaborative knowledge creation

This paper examines the characteristics of the collaborations between inventors in the United Kingdom (UK) by looking at what types of proximities - geographic, organisational, cognitive, social, and cultural-ethnic - be...Read more...

SERC/Urban and Spatial Programme Discussion Paper

Why Does Birthplace Matter So Much? Sorting, Learning and Geography

We consider the link between birthplace and wages. Using a unique panel dataset we estimate a raw elasticity of wage with respect to birthplace size of 4.6%, two thirds of the 6.8% raw elasticity with respect to city siz...Read more...

Journal article

Ecological Economics:

The greener, the happier? The effect of urban land use on residential well-being

We investigate the effect of urban land use on residential well-being in major German cities, using panel data from the German Socio-Economic Panel and cross-section data from the European Urban Atlas. We reduce concerns...Read more...

CentrePiece article

The path from cause to effect: mastering 'metrics

How should researchers interested in social and economic policy untangle cause and effect? A new book by Joshua Angrist and Jorn Steffen Pischke shows how the five core econometric tools -randomised trials, regression, ...Read more...

CEP discussion paper

European identity and redistributive preferences

How important is spatial identity in shifting preferences for redistribution? This paper takes advantage of within-country variability in the adoption of a single currency as an instrument to examine the impact of the re...Read more...

CEP discussion paper

Space-time (in)consistency in the national accounts: causes and cures

In early 2014 the World Bank published the main findings of the 2011 International Comparison Program (ICP). The result was surprising: the world is apparently richer and more equal than we would have expected based on e...Read more...

CEP election analysis

The Economic Performance of UK Cities: Can Urban and Regional Policy Make a Difference to the North-South Divide

There are large variations in economic performance across UK cities and on some measures, they have widened since the global financial crisis. All main parties promise action to reduce them, but there is little differenc...Read more...

Journal article

Journal of International Economics:

Spatial exporters

In this paper, we provide causal evidence that firms serve new markets which are geographically close to their prior export destinations with a higher probability than standard gravity models predict. We quantify the imp...Read more...

CEP discussion paper

European integration and the gains from trade

This chapter discusses whether and how .new quantitative trade models.(NQTMs) can be fruitfully applied to quantify the welfare effects of trade liberalization, thus shedding light on the trade-related effects of further...Read more...