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Multipliers, Markups, and Mobility Rents: In Defense of ‘Chain Models’ in Urban and Regional Analysis

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  • Joseph Persky

    (Department of Economics, University of Illinois at Chicago (M/C 144), 601 South Morgan Street, Chicago, IL 60607, USA)

  • Daniel Felsenstein

    (Department of Geography, Hebrew University of Jerusalem, Mount Scopus, Jerusalem, Israel)

Abstract

Social scientists have long used ‘chain’ metaphors, yet their methodological justification remains somewhat hazy. This paper offers a rationale for using chains to measure changes in economic welfare in urban and regional contexts. In contrast to the Marshallian surplus, which well describes situations in which price changes generate rents in a single market, chains are especially useful in markets where changes lead to the transmission of demand or supply through a series of markets characterized by sticky prices and markups. This argument is illustrated by reference to chain-driven analyses of local production, labor, and housing markets. The institutional structures that underpin chain models are stressed.

Suggested Citation

  • Joseph Persky & Daniel Felsenstein, 2008. "Multipliers, Markups, and Mobility Rents: In Defense of ‘Chain Models’ in Urban and Regional Analysis," Environment and Planning A, , vol. 40(12), pages 2933-2947, December.
    • Handle: RePEc:sae:envira:v:40:y:2008:i:12:p:2933-2947
    DOI: 10.1068/a4027
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    References listed on IDEAS

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