Is new economic geography right?.
Cambridge, Mass. : National Bureau of Economic Research, ©2011
|提及的人：||Paul R Krugman; Paul R Krugman|
Jessie Handbury; David E Weinstein; National Bureau of Economic Research.
|描述：||1 online resource (53 pages) : illustrations.|
|叢書名：||Working paper series (National Bureau of Economic Research), no. 17067.|
|責任：||Jessie Handbury, David E. Weinstein.|
The agglomeration force behind the New Economic Geography literature initiated by Krugman is based on the notion that larger markets should have a lower variety adjusted price index. Despite his Nobel Prize, there have been no tests of this idea. This paper represents the first such test. Using a rich dataset covering 10-20 million purchases of grocery items, we find that after controlling for store and shopping effects: 1) Aggregate grocery prices are lower in larger cities; 2) Residents of larger cities have access to substantially more varieties than residents of smaller cities; and 3) These forces combine to substantially lower variety adjusted prices in large cities. In short, Krugman was right.