Measuring Agglomeration: Which Estimator Should We Use?

25 Pages Posted: 23 Nov 2015

See all articles by Stephen B. Billings

Stephen B. Billings

University of Colorado - Boulder

Erik Barry Johnson

University of Alabama - Department of Economics, Finance and Legal Studies

Date Written: November 19, 2015

Abstract

With the tremendous growth of research in industrial agglomeration has come increased complexity in the construction of a `better' measure of agglomeration. The research presented here tests the properties of commonly used agglomeration indices through a series of simulations. Results suggest that applied researchers benefit from continuous measures of agglomeration like the Duranton-Overman index or a continuous version of the Gini coefficient, especially for industries with fewer establishments. Conclusions suggest that commonly used estimators of industrial agglomeration vary in how they quantify spatial distributions and researchers need to use the agglomeration index best suited for their specific research question.

Keywords: agglomeration; spatial statistics

JEL Classification: R

Suggested Citation

Billings, Stephen B. and Johnson, Erik Barry, Measuring Agglomeration: Which Estimator Should We Use? (November 19, 2015). Available at SSRN: https://ssrn.com/abstract=2693098 or http://dx.doi.org/10.2139/ssrn.2693098

Stephen B. Billings (Contact Author)

University of Colorado - Boulder ( email )

Leeds School of Business
Koelbel Building
Boulder, CO US 80309
United States

Erik Barry Johnson

University of Alabama - Department of Economics, Finance and Legal Studies ( email )

P.O. Box 870244
Tuscaloosa, AL 35487
United States
(720)234-7675 (Phone)

HOME PAGE: http://https://github.com/erikbjohn

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