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Preference Heterogeneity And Economic Geography

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  • Antonella Nocco

Abstract

ABSTRACT We investigate the effect of preference heterogeneity between skilled and unskilled workers on agglomeration, and we identify a new source of dependence of equilibrium prices on the demand properties shaped by the inter‐regional distribution of workers. We find a new preference effect, and we show that when the intensity of skilled workers' preference for the modern good and its variety is strong enough, prices charged by firms may even increase when the mass of local firms increases, therefore acting as a new dispersion force when trade costs are low or as a new agglomeration force when trade costs are high.

Suggested Citation

  • Antonella Nocco, 2009. "Preference Heterogeneity And Economic Geography," Journal of Regional Science, Wiley Blackwell, vol. 49(1), pages 33-56, February.
    • Handle: RePEc:bla:jregsc:v:49:y:2009:i:1:p:33-56
    DOI: 10.1111/j.1467-9787.2008.00578.x
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    References listed on IDEAS

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    Cited by:

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    3. Michael Beenstock, 2017. "How internally mobile is capital?," Letters in Spatial and Resource Sciences, Springer, vol. 10(3), pages 361-374, October.
    4. Raphael A. Auer, 2013. "Product Heterogeneity, Cross-Country Taste Differences, and the Consumption Home Bias," Working Papers 13.01, Swiss National Bank, Study Center Gerzensee.
    5. Raphael Auer, 2009. "Product Heterogeneity, Within-Industry Trade Patterns, and the Home Bias of Consumption?," Working Papers 09.05, Swiss National Bank, Study Center Gerzensee.
    6. Mark D. Partridge, 2010. "The duelling models: NEG vs amenity migration in explaining US engines of growth," Papers in Regional Science, Wiley Blackwell, vol. 89(3), pages 513-536, August.
    7. Christian Ghiglino & Antonella Nocco, 2017. "When Veblen meets Krugman: social network and city dynamics," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 63(2), pages 431-470, February.
    8. Michael Beenstock & Daniel Felsenstein, 2010. "Marshallian theory of regional agglomeration," Papers in Regional Science, Wiley Blackwell, vol. 89(1), pages 155-172, March.
    9. Christian Ghiglino, 2011. "When Veblen meets Krugman," 2011 Meeting Papers 768, Society for Economic Dynamics.
    10. Stein Østbye, 2010. "Regional Policy Analysis In A Simple General Equilibrium Model With Vertical Linkages," Journal of Regional Science, Wiley Blackwell, vol. 50(3), pages 756-775, August.

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