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Market Access and Regional Wage Structure: Estimating the Helpman-Hanson Model for Sweden
Jönköping University, Jönköping International Business School, JIBS, Economics.
2012 (English)Independent thesis Advanced level (degree of Master (One Year)), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

In this paper the Helpman-Hanson model is estimated using Swedish municipality level data. The Helpman-Hanson model builds on Krugman’s contributions to the NEG theory but makes use of a housing sector instead of the usual agricultural sector. The Helpman-Hanson equation is optimized both in levels and in first differences and the results confirm a positive relationship between wages and market potential, although the effect of transport costs on the distribution of wages turns out to be non-existent. Additionally, all of the estimated structural parameter values end up within the consistency ranges required by theory and most of them, except for a very large estimate for the elasticity of substitution, fall in line with previous research.

Place, publisher, year, edition, pages
2012. , 30 p.
Keyword [en]
Helpman (1998), Hanson (2005), Market Potential, Krugman model, New Economic Geography
National Category
URN: urn:nbn:se:hj:diva-19200OAI: diva2:545303
Subject / course
IHH, Economics
Social and Behavioural Science, Law
Available from: 2012-08-31 Created: 2012-08-19 Last updated: 2012-08-31Bibliographically approved

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Market Access and Regional Wage Structure(4227 kB)104 downloads
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