The role of agglomeration and dispersion forces on the spatial distribution of economic activity in Chile: an empirical analysis of spatial wage distribution and regional housing prices
This thesis begins with an Introduction oriented to guide the reader in two main aspects. First, Chile presents an excessive level of spatial concentration around the Metropolitan Region of Santiago (MR). Second, this spatial concentration is critical for the case of wages. In spite of the relevance, the Introduction shows the lack of discussion to understand the forces affecting this spatial distribution. In this sense, the Introduction proposes “[This thesis]covers this gap offering three essays oriented to understand what factors are generating this wage distribution and the consequences of the excessive spatial concentration on the MR, such as the congestion cost associated with the housing prices”. The Chapter 2 is the first approach to estimate the role of the second nature on the regional wages through the estimation of two NEG models. This chapter suggests the important role of the second nature, but the evidence is weak. The lack of evidence provided by Chapter 2 is attributed to the fact that NEG captures one of the potential set of sources behind the wage differentials. This problem motivates the development of the Chapter 3. This chapter proposes different causal mechanisms that modify the theoretical NEG model to represent the additional sources. A new empirical approach is provided to evaluate the role of alternative theories such as the role of amenities. Finally, the Chapter 4 shows a different side of the spatial concentration which is related with the dispersion forces. This section proposes a novel methodology to estimate a housing price index at regional level. This new methodology allows to compare the price of heterogeneous goods across the space, being a contribution for regional analysis of dispersion forces. While the regions with initial endowments, such as copper and salmon, show high level of housing prices; MR does not present the highest level of housing price. This result suggests that the case of Chile seems to be managed by agglomeration forces stronger than dispersion forces. Moreover, the concentration of high wages around the MR could be higher, increasing the magnitude of spatial inequality for the case of Chile.
University of Illinois - Urbana-Champaign
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University of Illinois at Urbana-Champaign