• Título:  THREE ESSAYS ON APPLIED MICROECONOMICS
• Autor:  Czinkan, Norbert
• Universidad:  Universidad de Alicante
• Departamento:  Fundamentos del análisis económico
• Fecha de Lectura:  25/07/2017
• Programa de doctorado:  Programa de Doctorado en Economía por la Universidad de Alicante
• Dirección: 
  • Collado Vindel, Maria Dolores (DIRECTOR)
  • Turino, Francesco (CODIRECTOR)
• Tribunal: 
  • ROCHINA-BARRACHINA, MARIA ENGRACIA (PRESIDENTE)
  • Serti, Francesco (SECRETARIO)
  • Razzolini, Tiziano (VOCAL)
• Descriptores: 
  • FLUCTUACIONES ECONOMICAS
  • MODELOS ECONOMETRICOS
  • DISTRIBUCION
• Fichero de tesis:
• http://hdl.handle.net/10045/72314
• Resumen:
  It is well-observed in economic geography that the spatial distribution of population and firms is far from random even after netting out geographical characteristics, such as the existence of natural resources, rivers, sea-berth, or the number of hours of sunshine in a year. Within countries, we observe denser areas with numerous active local companies with higher market potential and sparsely populated locations as well. Agglomeration affects a wide range of economic phenomena that influence the daily life of economic agents: it causes higher productivity levels for firms or higher wages for workers. On the other hand, denser areas are also associated with congestion effects and increased rent and price level on the goods and real estate market. The underlying motivation of my dissertation is to understand relatively less studied or new consequences of agglomeration forces. In particular, the main goal of this thesis is to estimate the impact of agglomeration on real estate prices and empirically investigate the effect of economic density on firm growth stability and assess the impact of those firm fluctuations on aggregate growth volatility. The dissertation contributes to the Microeconomics field from an applied econometric perspective, and it is divided into three separate chapters. The first chapter of the dissertation tests the implication of a simplified version of a Ricardian rent model on Hungarian data, using cross-sectional OLS techniques and finds that population, population growth and better accessibility to the center is positively associated with housing prices. The second chapter empirically investigates the role of economic density on firm fluctuations and suggests a negative relation between firm growth volatility and local (economic) density. I apply firm fixed effects and instrumental variables techniques. As shown in the third chapter, firm-level fluctuations have consequences at the aggregate level as well. According to the findings of the third chapter, idiosyncratic shocks are able to shape business cycles with a high relative standard deviation. Next, I summarize each chapter separately. The first chapter investigates a cross section of Hungarian settlement-level unit housing prices with a special emphasis on measuring the effect of population and its growth, along with accessibility to the center of an aggregated spatial unit such as a micro-region, county or region for the period 2001-2011. The estimation is guided by the implications of a simplified monocentric urbanized area framework following the model of DiPasquale and Wheaton (1996) and the econometric model is augmented with population growth rate at the settlement level to bridge the theory explaining rents and data base containing prices instead. The results suggest that a 10 percentage point higher expected population growth raises housing prices by 2-10% and the estimated elasticity of housing prices with respect to city size varies from 0.065 to 0.21 depending on the level of regional aggregation. The relative location of the area within the settlement hierarchy matters too: living one minute further from the micro-regional center results in 2% cheaper housing. Understanding the consequences of (the changing) population on housing prices is crucial as housing constitutes the largest share of most households' wealth. The findings, according to which a negative population growth decreases housing prices, implies serious consequences to local housing markets in the middle run, taking into account that in many countries considerable changes are expected to happen to the age structure with an uneven spatial distribution. Settlements with lower expected future population, such as small villages in the South Trans-Danubian areas or at the North-East regions of Hungary, tend to have lower housing prices already. Meanwhile, the housing markets of growing suburban belts enjoy an increased price level due to expected increasing population. Not just the change but the magnitude of the population is crucial in determining housing prices, a factor mostly and wrongly ignored from hedonic approaches. The elasticity of population on housing prices is significantly positive too. As predicted by the Ricardian rent theory, the relative location is also a key factor in determining housing prices: living further from the micro-regional center results in cheaper housing, however, relative location to further aggregated centers, such as to the county or regional center, has no impact on housing prices. The second chapter empirically investigates the role of the density of economic activity on firm-level sales and employment growth volatility using Hungarian balance sheet data of manufacturing firms over the period 2000-2008. According to the main findings, the elasticity of firm sales and employment growth volatility with respect to local economic density is significantly negative. The estimation employs firm fixed effects and instrumental variables techniques. Local density measures are instrumented by historical population values in the spirit of Ciccone and Hall (1996). The results suggest that doubling local population or the number of firms or workers in a given municipality or micro-region mitigates firm sales and employment fluctuations by 2-11% depending on the regional stratification and density measures used. More stable sales and employment growth in denser areas can be explained by the proximity to potential local input providers and having access to a ¿deeper" labor market pool. According to the main findings of the second chapter, agglomeration forces could also have positive impact on economic agents. The dissertation gives new insight of such advantages by providing empirical evidence on the effect of economic density on firm growth stability. The results indicate that doubling local population or the number of firms or workers in a given municipality or micro-region mitigates firm sales and employment fluctuations by 2-11% depending on the regional stratification and density measures. Our main findings suggest that proximity to other firms, especially to potential input providers, and larger labor markets is associated with a more stable growth path. On the other hand, in less agglomerated municipalities and micro-regions individuals face a higher risk of being laid off, which calls for the necessity of taking into account those risks not only for workers but also for labor policy makers. Our findings could provide new insights for regional policy debates as well. The third chapter demonstrates that the afore-mentioned firm fluctuations can have serious consequences at the aggregated level as well. This chapter investigates the role of activities by Hungarian firms in generating aggregate fluctuations. The analysis closely follows Di Giovanni et al. (2014). I first decomposed aggregated sales volatility into a macro-sectoral and a firm-specific component. The latter one is computed simply as the deviation of firm sales growth from the industrial average growth in a given year. I found that shocks to individual firms significantly contribute to aggregate fluctuations for the time period 2000-2013. It turns out that the relative contribution of idiosyncratic shocks to aggregate sales volatility at aggregate level is surprisingly high: 55.5% for the whole economy and 56.4% for the manufacturing sector, respectively. The main mechanisms through which firm fluctuations manifest themselves to aggregate fluctuations are input-output linkages, whereas the granular firm size distribution plays a relatively less important role in driving the results. Although at the individual level mostly idiosyncratic shocks hit firms ¿ unlike the decades-old common wisdom according to which idiosyncratic shocks average out at the macro level ¿ those firm-level shocks are also capable to shape the business cycle having a strikingly high relative contribution to the aggregated sales growth volatility. Even though Hungary is one of the most open economies of the world exposed to sizable foreign and sectoral shocks, almost 50% of the aggregate sales volatility is due to firm-level fluctuations. Evidence suggests that the high contribution of firm-specific factors to aggregate fluctuations are driven by firm-to-firm linkages: shocks to a single firm can propagate and be amplified through production networks. Although the Hungarian sales are quite concentrated, the results also imply that the performance of large firms by their own have a moderate impact on aggregate volatility. The surprisingly high importance of firm-level shocks in generating business cycles calls for the necessity of future research on understanding the determinants of firm-level disturbances. The dissertation makes several contributions to the field of Urban and Real Estate Economics and firm fluctuation research being the first quantifying the impact of the changing population on housing prices and calculating the relative standard distribution of idiosyncratic shocks to aggregate sales volatility using Hungarian data. Chapter 2 tests and validates a new idea, according to which economic density has an effect on firm growth stability.