Jesús López-Rodríguez

Does distance matter for determining regional income in the European Union? An approach through the market potential concept

This paper focuses on the relationship between market potential and income for the European Union (EU) regions over the period 1982–1999. It is proved that closeness to large consumer markets or in other words, market potential, is an important explanatory variable for regional income in the early 1980s, but it has decreased its significance in determining EU regions income in the 1990s. Thus dynamic income regions have also emerged in the EU periphery, and need not necessarily be close to rich regions.

Market access and human capital accumulation: the European Union case

This study evaluates the role that market access plays in determining the spatial distribution of educational attainment levels among EU regions. Evidence is provided showing that in the EU educational attainment levels are higher in those regions with greater market access. This finding proves that remoteness is a penalty for the economic development and convergence of the European Union regions.

Market Potential, Spatial Dependences and Spillovers in European Regions

Bruna F., Lopez-Rodriguez J. and Faíña A. Market potential, spatial dependences and spillovers in European regions, Regional Studies. This paper reinterprets the new economic geography (NEG) ‘wage’ equation by distinguishing two different types of spatial dependences: a global spatial trend and local spatial autocorrelation. A measure of the variable Market Potential in this equation can capture both a global core–periphery pattern and spillovers, while the standard weights matrices of spatial econometrics tend to be designed to capture short-distance interactions among neighbours. Using cross-sectional European regional data, the paper compares different weighting schemes to build spatial lags. The estimation of spatial models of an NEG equation for gross value added per capita (GVApc) reveals new research challenges.

The Economic Geography of EU Income: Evolution Since the Eighties

This paper evaluates the role that geography plays in determining the spatial distribution of EU income. We argue that geography matters for income disparities among EU regions, providing evidence that the geography of access to markets is statistically significant and quantitatively important in explaining cross-regions variation in EU per capita income. However, we also proved that its explanatory power in the levels of EU per capita income has been decreasing since the eighties. Thus, dynamic income regions have also emerged in the periphery, and need not necessarily be close to rich regions.

Objective 1 regions versus non-objective 1 regions. What does the Theil Index tell us?

The evolution of regional income disparities between two blocks of regions, objective 1 regions and non-objective 1 regions is analysed for the period 1982 to 1997, by using a Generalized entropy index such as the Theil index. The results show that between 1982 and 1987 the income disparities between objective 1 regions and non-objective 1 regions have increased, while from 1987 onwards objective 1 regions catch up with the non-objective 1 regions.

Mind the Remoteness!: Income disparities across Japanese Prefectures

In this paper we analyze the role played by market access to explain income disparities among Japanese Prefectures for different periods of time. The results of the estimations suggest that 1) market access plays an important role in the explanation of income disparities in Japan, 2) the effect of market access is robust to the inclusion of control variables considered important in the explanation of the Japanese income disparities, 3) the estimations show a tendency for the market access variable to lose explanatory power throughout the time. In this 10 year time span analyzed from 1996 to 2005 the decrease in explanatory power of market access was around 15%.

Is market potential robust in explaining regional educational levels in Europe

This article analyses the robustness of market potential as an explanatory variable of regional educational levels in the European Union. When included by its own, market potential is shown to be statistically significant and quantitatively important in explaining cross-region variation in educational levels. This finding is robust in controlling for a wide range of considerations, including other geographic and economic characteristics, showing that economic geography matters in determining educational attainment levels in Europe.

Market Potential and the curse of distance in European regions

In the context of the New Economic Geography (NEG) wage equation, the ‘curse of distance’ is the tendency of peripheral regions to have lower income because of being far from the main markets, as captured by a variable Market Potential. This pattern is consistent with the core-periphery spatial distribution of the European regional economic activity. Nevertheless, during the last decades, the European Union has been implemented active transport and regional policies, which should mitigate the consequences of peripherality. This paper analyzes the changes of the cross-sectional effects of Market Potential on the European regional income per capita during the sample period 1995-2008. The paper finds evidence that the cross-sectional elasticity of per capita income to Market Po-tential has been decreasing over the sample period. However, some results are sensitive to changes in the specification of the wage equation or the estimation method.

Nontaxable income and necessary consumption: the Rousseau’s paradox of fiscal egalitarianism

This article compares a tax method featuring flat rates and fixed allowances equal for all taxpayers (Surplus Income Tax Method (SITM) procedure) with a tax method featuring also flat rates and increasing personal allowances (IPAs) to meet the amounts of necessary consumption required by the different living standards (Discretionary Income Tax Method (DITM) procedure). Our results show that the DITM procedure generates an after-tax income distribution less unequal and superior in terms of social welfare. Moreover, the assumption (for comparison purposes) of identical total tax revenues leads to the corollary that the flat tax rate under the DITM is necessarily larger than the one under the SITM; being thus, the former taxmethod is more progressive than the latter. These results imply an obvious paradox considering the commonly accepted principle that basic necessities are the same for everyone (Rousseau, 1755). Based on the results obtained in this article, we have labelled this paradox as the Rousseau’s paradox of fiscal egalitarianism.

Spatial effects in the bid price setting strategies of the wholesale electricity markets: The case of Colombia

Weather conditions in Colombia vary greatly throughout the territory and therefore the location of electricity generating plants plays a key role in their bid pricing strategies. To account for these location-specific pricing strategies this paper estimates a Spatial Durbin Model (SDM) with monthly data gathered from the 17th largest hydraulic electricity generating plants of Colombia on bid prices, generation, energy inputs and positive reconciliation over the period January 2005-August 2015 and controlling also for the system marginal prices and the economy cycle. The paper reports three main results. First, firms ? bid prices are negatively affected by the energy inputs of the rivals, second they are unaffected by positive reconciliation payments to the rivals and third they are negatively affected by the generation amounts of the rivals. One potential policy recommendation of these results is the need to implement balancing markets to signal more efficiently the pricing strategies in these markets.