Welfare Benefits of Agglomeration and Worker Heterogeneity

40 Pages Posted: 21 Oct 2014

See all articles by Coen N. Teulings

Coen N. Teulings

Tinbergen Institute

Henri L. F. de Groot

VU University Amsterdam - Department of Spatial Economics; Tinbergen Institute

Ioulia V. Ossokina

Erasmus University Rotterdam - General Economics

Date Written: October 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: agglomeration, land rates, local public goods, residential sorting, spatial equilibrium

JEL Classification: H4, H54, R13, R23, R4

Suggested Citation

Teulings, Coen N. and de Groot, Henri L.F. and Ossokina, Ioulia V., Welfare Benefits of Agglomeration and Worker Heterogeneity (October 2014). CEPR Discussion Paper No. DP10216. Available at SSRN: https://ssrn.com/abstract=2512744

Coen N. Teulings

Tinbergen Institute ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Henri L.F. De Groot (Contact Author)

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

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)

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