Raising the Bar (3)

Abstract

This editorial summarizes and comments on the papers published in issue 11(3) so as to raise the bar in applied spatial economic research and highlight new trends. The first paper proposes spatial and a-spatial indicators to describe the networks of airline companies around the world. The second paper sets forth a two-regime gravity-type model with an endogenous threshold parameter to assess the effect of labour market conditions on interregional migration flows. The third paper utilizes micro-data to explain student migration flows to higher education institutions. The fourth paper is among the first to make use of simulation-based location quotients in a multiregional input–output model. Finally, the last paper provides a purely economic–theoretical model on cooperative limit pricing in the context of spatial competition.

Résumé

Cet éditorial résume et commente les articles parus dans le numéro 11(3) afin de placer la barre de la recherche économique spatiale appliquée plus haut et de souligner les nouvelles tendances. Le premier article propose des indicateurs spatiaux et non-spatiaux pour présenter les réseaux de compagnies aériennes partout dans le monde. Le deuxième article expose un modèle de gravité type à deux regimes doté d’un paramètre de seuil endogène pour évaluer l’impact des conditions du marché du travail sur les flux migratoires interrégionaux. Le troisième article emploie des données microéconomiques afin d’expliquer les flux migratoires des étudiants à destination des établissements d’enseignement supérieur. Le quatrième article compte parmi les premiers à se servir des quotients de localisation sur base de la simulation dans le contexte d’un modèle des entrées-sorties multirégional. Pour terminer, le dernier article fournit un modèle purement économico-théorique sur les prix limites des coopératives dans le cadre de la concurrence spatiale.

Resumen

Este editorial es un resumen y una observación acerca de los artículos publicados en el número 11(3) con la finalidad de elevar el listón en la investigación económica espacial aplicada y resaltar las nuevas tendencias. En el primer artículo se proponen indicadores espaciales y no espaciales para describir las redes de las compañías aéreas de todo el mundo. En el segundo artículo se presenta un modelo de tipo gravitacional de dos regímenes con un parámetro de umbral endógeno para evaluar el efecto de las condiciones del mercado laboral en los flujos de migración interregional. En el tercer artículo se utilizan datos micro para explicar los flujos de migración estudiantil a centros de educación superior. El cuarto artículo es uno de los primeros en utilizar cocientes de localización basados en una simulación en un modelo plurirregional de entradas y salidas. Finalmente, el último artículo ofrece un modelo puramente económico-teórico sobre el precio del limite de las cooperativas en el contexto de la competencia espacial.

摘要

本编辑短评概括并评论在第十一卷第三辑中出版的文章, 以提高应用空间经济研究的标准, 同时强调新的趋势。第一篇文章提出描绘全球航空公司网络的空间与非空间指标。第二篇文章开啓两种状态的引力模型, 并以内生的阈值参数来评量劳动市场条件对于跨区域迁徙流动的影响。第三篇文章运用微观数据, 解释学生至高等教育机构的迁徙流动。第四篇文章是首先在多重区域投入—产出模型上运用根据模拟的区位商数的研究之一。最后一篇文章, 则对空间竞争脉络中的协作限制定价, 提供了纯粹的经济—理论模型。

Keywords:

• Network metrics
• thresholds
• deterrence
• simulation

JEL classifications:

• C
• L
• Q
• R

Spatial Economic Analysis is a pioneering journal dedicated to the development of theory and methods in spatial economic analysis. This issue contains five papers contributing to these theoretical and empirical developments.

The spatial econometrics literature has paid a lot of attention to the impact of spatial lags of the dependent variable, the independent variables and the error term. The matrix describing the interactions between the units in a sample is commonly denoted by the symbol W and assumed to be exogenous. Only recently have attempts been made in different directions in order to abandon the exogeneity assumption. This topic was recently discussed and illustrated with examples in the editorial to issue 11(1) of this journal (Elhorst et al., 2016).

The first contribution to this issue, by O’Kelly (2016, in this issue) and based on his plenary talk at the Dublin meetings of the Regional Science Association International British and Irish Section in 2015, is another interesting contribution to this discussion for two reasons. First, this paper makes use of methods originating in different fields, as shown by the citations, ranging from transportation, geography and economics to network theory. Summarizing network properties by socio-economic indicators is a fascinating problem and this paper is a step forwards in our understanding of this problem. O’Kelly points out that social network studies have provided many metrics for this purpose, but according to him it is vital to treat the individual airports (nodes) in their unique spatial context, and to avoid the over-interpretation of macro statistics that come from a-spatial (scale-free) metrics. For this purpose, he proposes nine indicators, which are calculated, analysed and discussed for 86 cities and the networks of 30 airline companies. Second, O’Kelly’s paper immediately makes clear that the organization of an airline network is a complex issue and anything but exogenous. It is therefore questionable to use spatial econometric techniques based on an exogenously specified W matrix to explain air passenger flows between a sample of city airports, so as to be able to investigate the existence of spillover effects.

The paper by Clemente et al. (2016, in this issue) addresses another interesting topic and suggests a two-regime gravity-type model to assess the effect of labour market conditions on interregional migration flows. It first develops a simple theoretical model that predicts that differences in labour conditions between the origin and destination regions matter only when they are large enough. The paper then tests the theoretical arguments by means of an empirical model that includes an endogenous threshold based on the wage level and employment rate, using Spanish interregional migration flows between 17 regions from 1988 to 2010. Explanatory variables in the model are labour force size, housing price, unemployment rate and real wage in both the region of origin and the region of destination, as well as the distance between these regions. The main methodological contribution of this paper is the extension of a standard gravity model with an unknown threshold parameter, which needs to be estimated and above which the response parameters of the explanatory variables are different than below it. This setup is used to show that a potential migrant is only willing to take the decision to migrate to another region if the benefits outweigh the costs to a sufficient degree. A two-step estimation procedure is used to estimate the parameters of the gravity model on the one hand, and the threshold parameter on the other hand.

The gravity model is also the tool used by Cullinan & Duggan (2016, in this issue) to provide a better understanding of student migration flows to higher education institutions in Ireland. The first interesting issue in this paper is the dataset being used; the authors employ flow data from 701 individual schools to 27 higher education institutions in the year 2013, covering 18,927 observations in total. The second interesting issue is the treatment of zero flows, 60.23% of the total number of observations, which is a recurring topic in Spatial Economic Analysis (see Mello-Sampayo, 2016, and Burger et al., 2009, for earlier contributions). To deal with zeros flows, Cullinan and Duggan compare the performance of three models using the Akaike information criterion: a fixed-effects Poisson model and two conditional fixed-effects negative binomial models. The empirical analysis is developed by means of the latter model, the best performing one, in which special attention is given to geographic factors, as well as school attributes. Results point to the important role of both geography and school-level variables. The study shows that the distance-deterrence effect varies across higher education institutions and across higher education institution types.

The renewed interest in the gravity model is an important trend in regional science. Spatial Economic Analysis welcomes new contributions in this area, especially if they are theoretically well founded, or when they focus on spatial econometric applications of the gravity model.

Hermansson (2016, in this issue) deals with the problem of how to simulate an input–output model for a desired geographical unit if an input–output table based on extensive surveying by statistical agencies is not available. Several non-survey and partial-survey methods have been proposed in the literature to overcome this problem, which are nicely summarized in this paper. The critical issue is the recognition of spillover effects due to wage and consumption flows, driven by commuting and shopping trips, especially if the geographical unit being considered is small. The authors investigate the extent to which this type of data can be better exploited, based on an interregional input–output model for three regions: Glasgow, the rest of Strathclyde (commuter belt) and the rest of Scotland. The spillover effects due to commuting and shopping trips are found to have significant multiplier effects. Both type I and II multipliers are computed, which makes it possible to assess the induced effects (in terms of extra consumption) of a change in final demand, as well as the more commonly calculated indirect effects. The study is the first to make use of the FLQ formula (Flegg et al.’s, 1995, simulation-based location quotient) in a multiregional context, which is a very welcome new application of this non-survey technique.

It was stated above that Spatial Economic Analysis is a pioneering journal dedicated to the development of theory and methods in spatial economic analysis: we are looking for submissions that contain novel contributions in terms of either theory, methodology and techniques or empirical content. However, not all readers and submitting authors are aware of the fact that we also welcome purely theoretical papers. The last paper by Fousekis (2016, in this issue) illustrates this. It provides a purely economic–theoretical model on cooperative limit pricing in the context of spatial competition. We hope these kinds of contributions will also be appreciated by readers. In publishing this paper we hope too to signal that our interest in theory-related work not only concerns deductive (theory-setting, theory-testing) approaches but also inductive approaches, that is, papers where examination of the data leads to the derivation of theoretical/quasi-theoretical propositions or to some dialogue with theoretical questions.