Market Access and Regional Wage Structure: Estimating the Helpman-Hanson Model for Sweden
Independent thesis Advanced level (degree of Master (One Year)), 20 credits / 30 HE creditsStudent thesis
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.
Helpman (1998), Hanson (2005), Market Potential, Krugman model, New Economic Geography
IdentifiersURN: urn:nbn:se:hj:diva-19200OAI: oai:DiVA.org:hj-19200DiVA: diva2:545303
Subject / course
UppsokSocial and Behavioural Science, Law
Bjerke, Lina, Ph.D.
Johansson, Börje, Professor