Welfare Benefits of Agglomeration and Worker Heterogeneity

39 Pages Posted: 17 Sep 2014

See all articles by Coen N. Teulings

Coen N. Teulings

University of Amsterdam; University of Cambridge

Ioulia V. Ossokina

Erasmus University Rotterdam - General Economics

Henri L. F. de Groot

VU University Amsterdam - Department of Spatial Economics; Tinbergen Institute

Multiple version iconThere are 2 versions of this paper

Date Written: September 19, 2014

Abstract

The direct impact of local public goods on welfare is relatively easy to measure from land rents. However, the indirect effects on home and job location, on land use, and on agglomeration benefits are hard to pin down. We develop a spatial general equilibrium model for the valuation of these effects. The model is estimated using data on transport infrastructure, commuting behavior, wages, land use and land rents for 3000 ZIP-codes in the Netherlands and for three levels of education. Welfare benefits are shown to differ sharply by workers’ educational attainment.

Keywords: local public goods, agglomeration, spatial equilibrium, residential sorting, land rents

JEL Classification: H40, H54, R13, R23, R40

Suggested Citation

Teulings, Coen N. and Ossokina, Ioulia V. and de Groot, Henri L.F., Welfare Benefits of Agglomeration and Worker Heterogeneity (September 19, 2014). CESifo Working Paper Series No. 4939. Available at SSRN: https://ssrn.com/abstract=2496881

Coen N. Teulings (Contact Author)

University of Amsterdam ( email )

Spui 21
Amsterdam, 1018 WB
Netherlands

University of Cambridge ( email )

Trinity Ln
Cambridge, CB2 1TN
United Kingdom

Ioulia V. Ossokina

Erasmus University Rotterdam - General Economics ( email )

P.O. Box 1738
3000 DR Rotterdam, NL 3062 PA
Netherlands
+31(0)10 408 2850 (Phone)
+31(0)10 408 9031 (Fax)

Henri L.F. De Groot

VU University Amsterdam - Department of Spatial Economics ( email )

De Boelelaan 1105
Amsterdam, 1081 HV
Netherlands
+31 20 598 6168 (Phone)
+31 20 598 6004 (Fax)

Tinbergen Institute

Gustav Mahlerplein 17
Amsterdam, 1082 MS
Netherlands

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