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Spatial And Supply/Demand Agglomeration Economies: An Evaluation Of State-And-Industry-Linkages In The U.S. Food System

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  • Cohen, Jeffrey P.
  • Morrison Paul, Catherine J.

Abstract

In this paper we postulate, measure, and evaluate the importance of cost-impacts from spatial and industrial spillovers for analysis of economic performance. To accomplish this, we incorporate measures of "activity levels" of related states and industries in a cost function model, and estimate their associated thick market and agglomeration effects in terms of shadow values and elasticities. We focus on the food processing sector, the proximity of own-industry activity in neighboring states, and the supply- and demand- side "drivers", associated with urbanization and localization economies (represented by the GSP and agricultural intensity in the own and neighboring states). We find significant cost-savings benefits to a states' food processing sector of being close to other food manufacturing centers (high levels of food processing activity in neighboring states). We also find it beneficial to be in a state with high purchasing power (demand), and to have neighboring states that are agriculture-based (supply). However, it also seems costly to actually be located in a heavily agricultural or rural state, possibly due to diseconomies from "thin markets" associated with infrastructure support and labor markets.

Suggested Citation

  • Cohen, Jeffrey P. & Morrison Paul, Catherine J., 2001. "Spatial And Supply/Demand Agglomeration Economies: An Evaluation Of State-And-Industry-Linkages In The U.S. Food System," Working Papers 11982, University of California, Davis, Department of Agricultural and Resource Economics.
    • Handle: RePEc:ags:ucdavw:11982
    DOI: 10.22004/ag.econ.11982
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    References listed on IDEAS

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    Cited by:

    1. Cohen, Jeffrey P. & Morrison Paul, Catherine J., 2001. "Hub and Spoke Airport Networks and State Airport Infrastructure Spillovers: A Spatial Econometrics Approach," Working Papers 190900, University of California, Davis, Department of Agricultural and Resource Economics.
    2. Cohen, Jeffrey P. & Morrison Paul, Catherine J., 2001. "Agglomeration Economies and Industry Location Decisions: The Impacts of Vertical and Horizontal Spillovers," Working Papers 190899, University of California, Davis, Department of Agricultural and Resource Economics.
    3. Qi, Guanqiu & Shi, Wenming & Lin, Kun-Chin & Yuen, Kum Fai & Xiao, Yi, 2020. "Spatial spillover effects of logistics infrastructure on regional development: Evidence from China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 135(C), pages 96-114.

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