Big ideas: economic geography

Henry Overman sketches the evolution of CEP research on why prosperity is so unevenly distributed across cities, regions and nations

Britain's regional divide

Henry Overman considers the regional distribution of prosperity and the potential policy responses.

LSE centre for economic performance: urban renewal and regional growth: muddled objectives and mixed progress

A new series of Election Analyses is now available from the LSE’s Centre for Economic Performance (CEP). The series will discuss the research evidence on some of the key policy battlegrounds of the 2010 General Election, including macroeconomic policy, immigration, health, education, crime, poverty and inequality, labour market policy, regional policy, energy and the environment, financial regulation and bankers’ bonuses, and foreign aid. Since 1997, the Labour government has spent considerable sums trying to narrow the gap between poor areas – neighbourhoods, cities and regions – and the rest. The latest CEP Election Analysis from the Centre for Economic Performance (CEP) considers the evidence on the effects of some of these policy initiatives, with a focus on the role of ‘area-based initiatives’, which try to improve outcomes in particular areas. According to author Professor Henry Overman, the evidence suggests that progress against objectives has been mixed. This is unsurprising: the economic processes that drive differences across cities and regions of the UK are poorly understood and what evidence we do have has played little part in the formulation of policy. As a result, there is confusion about what urban and regional policy could and should try to achieve – and the parties’ positions tend to be based on belief rather than evidence

NHS competition: bad science or bad blogging?

Following yesterday’s post criticising the LSE research that is underpinning the drive towards competition and choice in the NHS, Henry Overman provides a defence of the research findings and questions the extent to which public understanding of the evidence has been enhanced by this exchange

HS2: assessing the costs and benefits

Henry Overman considers the arguments for and against building a new high-speed rail line from London to Birmingham.

How did London get away with it?

Despite dire predictions, the UK capital has experienced a relatively mild recession, at least so far - Henry Overman asks what went right

Can We Learn Anything from Economic Geography Proper?

Abstract This paper considers the ways geographers (proper) and (geographical) economists approach the study of economic geography. It argues that there are two areas where the approach of the latter is more robust than the former. First, formal models both enforce internal consistency and allow one to move from micro to macro behaviour. Second, empirical work tends to be more rigorous, emphasising the importance of getting representative samples, testing whether findings are significant, identifying and testing empirical predictions from theory and dealing with issues of observational equivalence. But any approach can be improved and so the paper also identifies ways in which geographical economists could learn from the direction taken by economic geographers proper.Economic geography, geographical economics, regional science, relational economic geography

London’s employment mix and the bank bailouts have helped it avoid the worst of the recession, but things do not look so rosy for the capital’s poor.

When the recession hit many predicted that London would fare the worst. Henry Overman argues that while incomes and employment have contracted in London in the last two years, the capital’s high proportion of professional and service occupations as well as government interventions (including the bank bailouts) have shielded it from the worst of the recession thus far, and has even led to some above average rises in spending.

Neighbourhood effects in small neighbourhoods.

This paper uses data on a sample of Australian teenagers to test for neighbourhood effects on school dropout rates. The data allows us to test for neighbourhood effects at two different spatial scales. We find that educational composition of the larger neighbourhood can influence the dropout rate. We argue that this is most likely to reflect the structure of local labour market demand. We also find that low socio-economic status of the immediate neighbourhood has an adverse impact on dropout rate. This suggests that government policy may need to consider the socio-economic composition of quite small geographical areas if it considers interfering in the market to create greater income mixing within neighbourhoods.

Can we learn anything from economic geography proper?.

This paper considers the ways geographers (proper) and (geographical) economists approach the study of economic geography. It argues that there are two areas where the approach of the latter is more robust than the former. First, formal models identify which assumptions are crucial in obtaining a particular result and enforce internal consistency when moving from micro to macro behaviour. Second, empirical work tends to be more rigorous. There is much greater emphasis on identifying and testing refutable predictions from theory and on dealing with issues of observational equivalence. But any approach can be improved and so the paper also identifies ways in which geographical economists could learn from the direction taken by economic geographers proper.