ECON 156: Urban and Regional Economics UC Merced, Spring 2015

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1 ECON 156: Urban and Regional Economics UC Merced, Spring 2015 Meeting Times: Tues, Thurs 3-4:15 PM COB110 Instructor: Dr. Alex Whalley Office Hours: Thurs 12-2 COB 391 (or by appointment) Course Description: This course will examine the causes and consequences of the clustering of economic activity across space. Central questions addressed will be: why do cities exist? Why and how does spatial clustering increase firm productivity? How does clustering affect housing and labor markets? Can economic policies create hightechnology clusters like Silicon Valley? What are the negative consequences of clustering? Topics may include: the role of input markets, natural advantages, institutions, and knowledge production in the location of clusters of economic activity, the effects of clustering on labor, land markets, the problems of congestion, pollution, and social tensions attributable to agglomeration, the production of local public goods (i.e. education, public safety, etc.) in urban areas. Course Goals and Outcomes: a. Course Goals: i. Explain the purpose of using economic modeling to address economic questions ii. Explain and be able to use economic models to evaluate policy in the area of urban and regional economics. b. Learning Outcomes: i. Be able to explain the purpose of using economic modeling to address economic questions ii. Be able to explain and be able to use economic models to evaluate policy in the area of urban and regional economics. Website: Any announcements, lecture notes, homework assignments and solutions, exam solutions, and additional material will be found on the course website on UCMCROPS. Please refer to it frequently, as it is your responsibility to read and print what you need off of it. I will make announcements in class and will new announcements whenever possible, but you would be wise to check the website before each class. Syllabus ECON 156 1

2 Course Requirements & Grading: Textbooks: Final: 40% Midterm: 20% Assignments: 20% Final Presentation and Paper: 20% Attendance is also not explicitly required, but you will find it in your best interests to attend class as not all exam material will be in the readings. Similarly, class participation is not explicitly graded, but it is in your interest to participate in the discussions to learn the material. The assignments will be due at the start of class. No late assignments will be accepted. The assignment with the lowest grade will be dropped. There will be a policy impact presentation and paper in the last few weeks of the class. The assignment will consist of applying concepts covered in class to evaluate the impact of policy in urban areas. The paper will be due on the last day of class. Precise details to follow. McCann, Phillip (2013) Modern Urban and Regional Economics, Oxford University Press Moretti, Enrico (2012) The New Geography of Jobs, Mariner Glaeser, Edward (2011) Triumph of The City, Penguin books Important Dates: March 17 th (3-4:15): MID TERM EXAM May 11 th (6:30-9:30): FINAL EXAM Academic Integrity: Students are expected to adhere to a code of academic integrity. Any form of cheating, falsification, or plagiarism constitutes a violation of this code. If you are found to be in violation, you will fail the course under all but exceptional circumstances. Ignorance of what constitutes academic dishonesty is not a valid excuse, so I encourage you to talk to me or a librarian if you are unsure of whether what you are considering is dishonest. In addition, please familiarize yourself with the campus policy on academic honesty, available under the resources section of the course website or at Obviously, working together on quizzes and exams is forbidden. However, this Syllabus ECON 156 2

3 Decorum: course will work best if everyone works together to learn the material. This means that working together on problem sets, studying together for exams, and discussing economics with your colleagues is not cheating, but is encouraged. In fact, if I feel that people are not learning the material, I will provide incentives for you to work together. All of the following points boil down to respecting your peers and your professor; however, I will list a few particularly important requests: As a courtesy to your peers, please turn your cell phones off while in class. I do not all allow open laptops in class. If you know you must leave early, please sit on an aisle. Your messages to me and to each other are a form of professional writing. Use correct spelling and grammar, capitalize appropriately, and be civil and respectful in all correspondence with me or your classmates. Note to Students with Disabilities: Final note: Any student who has a disability that might interfere with her/her work or participation in this course should see me, so that we can make appropriate accommodations. All policies of the University California Merced also apply to this course. Syllabus ECON 156 3

4 Tentative Class Schedule and Required Reading List (subject to change) (1) Introduction: Why Do We Care? Where do We Start? Glasear (2012) Introduction Moretti (2011) Introduction (2) Why do Cities Exist? (3) Spatial Equilibrium Glaeser, Edward The Economic Approach to Cities (4) Urban History Mcann (2013) Chapter 8 Glaeser. Reinventing Boston: Journal of Economic Geography (2005) Kim, Sookoo (1995) Expansion of Markets and the Geographic Distribution of Economic Activities: The Trends in U. S. Regional Manufacturing Structure, , The Quarterly Journal of Economics, Vol. 110, No. 4. (Nov., 1995), pp (5) Fundamentals, Adjustment, and Long Term Persistence Moretti (2012) Chapter 1 Glasear (2011) Chapter 2 Davis, D. and D. Weinstein (2002) Bones, Bombs, and Break Points: The Geography of Economic Activity., American Economic Review, vol. 92, no. 5, pp Hornbeck, Rick "The Enduring Impact of the American Dust Bowl: Short and Long-run Adjustments to Environmental Catastrophe," forthcoming, American Economic Review. (6) Sources of Agglomeration Economies McCann (2013) Chapter 2 Moretti (2012) Chapter 4 Syllabus ECON 156 4

5 Greenstone, Hornbeck & Moretti Identifying Agglomeration Spillovers: Evidence from Winners and Losers of Large Plant Openings Journal of Political Economy (2010) Ellison, Glenn, Edward Glaeser, and William R. Kerr. "What Causes Industry Agglomeration? Evidence from Coagglomeration Patterns." The American Economic Review 100 (June 2010): (7) Cities and Ideas Jaffe, Adam B.; Trajtenberg, Manuel and Henderson, Rebecca. "Geographic Knowledge Spillovers as Evidenced by Patent Citations." Quarterly Journal of Economics, August 1993, 108(3): Kantor, Shawn and Alexander Whalley (2014) Knowledge Spillovers from Research Universities: Evidence from Endowment Value Shocks, Review of Economics and Statistics, March 96(1): Duranton, Giles (2007) Urban evolutions: the fast, the slow, and the still, American Economic Review, 2007, 97 (1), (8) Human Capital and Learning Glasear (2011) Chapter 1 Moretti (2012) Chapter 2 Moretti, Enrico (2004) Workers Education, Productivity and Spillovers: Evidence from Plant- Level Production Functions, American Economic Review 84(3): Glaeser, Edward L. and David Mare Cities and Skills. Journal of Labor Economics 19(2): (9) Amenities and Consumption Glasear (2011) Chapter 4 and 5 Banzhaf, H. Spencer, and Randall P. Walsh "Do People Vote with Their Feet? An Empirical Test of Tiebout." American Economic Review, 98(3): Syllabus ECON 156 5

6 Glaeser, Kolko and Saiz Consumer City. Journal of Economic Geography (2000) (10) Urban Land Use McCann (2013) Chapter 4 Burchfield, Overman, Puga, and Turner Causes of Sprawl: A Portrait from Space Quarterly Journal of Economics.121 (May): Baum-Snow. Did Highways Cause Suburbanization? Quarterly Journal of Economics (2007) (11) Transportation Small and Perry (2009) "Should Urban Transit Subsidies Be Reduced?" American Economic Review, 99(3), 2009, pp Duranton and Turner (2011) The Fundamental Law of Road Congestion: Evidence from US Cities American Economic Review, 2011, 101(6), Duranton and Turner (2011) Urban Growth and Transportation, Review of Economic Studies (12) Increasing Returns and Market Access McCann (2013) Chapter 3 Paul Krugman Increasing Returns and Economic Geography Journal of Political Economy, Vol. 99, No. 3 (Jun., 1991), pp Redding, Stephen J., and Daniel M. Sturm "The Costs of Remoteness: Evidence from German Division and Reunification." American Economic Review, 98(5): Bleakly and Lin (2011) Portage and Path Dependence, Quarterly Journal of Economics (13) Housing Syllabus ECON 156 6

7 Ferreria and Gyourko (2011) "Anatomy of the Beginning of the Housing Boom: U.S. Neighborhoods and Metropolitan Areas, " 1.pdf Ferreria, Gyourko and Tracy (2011) "Housing Busts and Household Mobility". Journal of Urban Economics, 2010, vol. 68(1), p (14) Valuing Local Public Goods: Education and Crime Black, Sandra (1999) Do Better Schools Matter? Parental Valuation of Elementary Education, Quarterly Journal of Economics, May Rothstein, Jesse, Stephanie Cellini and Fernando Ferreira "The Value of School Facility Investments: Evidence from a Dynamic Regression Discontinuity Design," with Stephanie Cellini and Fernando Ferreira. Quarterly Journal of Economics. 125 (1), February 2010, p.p Leigh Linden & Jonah E. Rockoff, "Estimates of the Impact of Crime Risk on Property Values from Megan's Laws," American Economic Review, vol. 98(3), pages , June. (15) Tiebout and Local Government Competition Hoxby, Caroline M. (2000) "Does Competition Among Public Schools Benefit Students And Taxpayers," American Economic Review, 90(5,Dec), Rothstein, Jesse (2007) "Does Competition Among Public Schools Benefit Students and Taxpayers? A Comment on Hoxby (2000)." American Economic Review 97(5), December 2007, pp (16) Sorting and Segregation Glaeser (2011) Chapter 3 David M. Cutler and Edward L. Glaeser (1997) Are Ghettos Good or Bad? The Quarterly Journal of Economics, Vol. 112, No. 3 (Aug.), pp Dippel, Christian (2014) Forced Coexistence and Economic Development: Evidence from Native American Reservations", Econometrica Forthcoming. Syllabus ECON 156 7

8 (17) Population Growth and City Size Gabaix, Xavier (1999) Zipf.s Law for Cities: An Explanation, Quarterly Journal of Economics, 114(3) (1999), Michaels, Guy, Ferdinand Rauch and Stephen Redding (2012) Urbanization and Structural Transformation Quarterly Journal of Economics, (18) Global Cities (If Time Permits) McCann (2013), Chapter 9 Aitken, Brian, Gordon H. Hanson, Ann E. Harrison Spillovers, Foreign Investment, and Export Behavior, Journal of International Economics, Vol. 43 (1997): (19) Urban Political Economy (If Time Permits) Ferreria and Gyourko (2009) "Do Political Parties Matter? Evidence from U.S. Cities", Quarterly Journal of Economics, February 2009, vol. 124(1), p Whalley, Alexander (2013) Elected Versus Appointed Policymakers: Evidence from City Treasurers Journal of Law and Economics, 2013, vol. 56(1): (20) Team Policy Impact Presentations (4 Classes) (21) Exam review (If Time Permits) (22) Final Exam May 11 th (6:30-9:30PM): Syllabus ECON 156 8

BGPE course: Regional and Urban Economics

BGPE course: Regional and Urban Economics Instructor: Gilles Duranton Email: duranton@wharton.upenn.edu Web: http://real.wharton.upenn.edu/~duranton/index.html Objectives: This course will explore a range