Welfare Benefits of Agglomeration and Worker Heterogeneity

40 Pages Posted: 16 Aug 2014

See all articles by Coen N. Teulings

Coen N. Teulings

University of Amsterdam; University of Cambridge

Ioulia V. Ossokina

Erasmus University Rotterdam - General Economics

Henri L. F. de Groot

Vrije Universiteit Amsterdam; Tinbergen Institute

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Abstract

The direct impact of local public goods on welfare is relatively easy to measure from land rents. However, the indirect effects on home and job location, on land use, and on agglomeration benefits are hard to pin down. We develop a spatial general equilibrium model for the valuation of these effects. The model is estimated using data on transport infrastructure, commuting behavior, wages, land use and land rents for 3000 ZIP-codes in the Netherlands and for three levels of education. Welfare benefits are shown to differ sharply by workers' educational attainment.

Keywords: local public goods, agglomeration, spatial equilibrium, residential sorting, land rents

JEL Classification: H4, H54, R13, R23, R4

Suggested Citation

Teulings, Coen N. and Ossokina, Ioulia V. and de Groot, Henri L.F., Welfare Benefits of Agglomeration and Worker Heterogeneity. IZA Discussion Paper No. 8382, Available at SSRN: https://ssrn.com/abstract=2481571 or http://dx.doi.org/10.2139/ssrn.2481571

Coen N. Teulings (Contact Author)

University of Amsterdam ( email )

Spui 21
Amsterdam, 1018 WB
Netherlands

University of Cambridge ( email )

Trinity Ln
Cambridge, CB2 1TN
United Kingdom

Ioulia V. Ossokina

Erasmus University Rotterdam - General Economics ( email )

P.O. Box 1738
3000 DR Rotterdam, NL 3062 PA
Netherlands
+31(0)10 408 2850 (Phone)
+31(0)10 408 9031 (Fax)

Henri L.F. De Groot

Vrije Universiteit Amsterdam ( email )

De Boelelaan 1105
Amsterdam, 1081 HV
Netherlands
0640494981 (Phone)
2135 DL (Fax)

Tinbergen Institute

Gustav Mahlerplein 17
Amsterdam, 1082 MS
Netherlands

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