DP6928 Dots to Boxes: Do the Size and Shape of Spatial Units Jeopardize Economic Geography Estimations?

Author(s): Anthony Briant, Pierre-Philippe Combes, Miren Lafourcade
Publication Date: August 2008
Keyword(s): agglomeration, concentration, gravity, MAUP, wage equation
JEL(s): C10, C43, O18, R12, R23
Programme Areas: International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=6928

This paper evaluates, in the context of economic geography estimates, the magnitude of the distortions arising from the choice of zoning system, which is also known as the Modifiable Areal Unit Problem (MAUP). We consider three standard economic geography exercises (the analysis of spatial concentration, agglomeration economies, and trade determinants), using various French zoning systems differentiated according to the size and shape of spatial units, which are the two main determinants of the MAUP. While size matters a little, shape does so much less. Both dimensions seem to be of secondary importance compared to specification issues.