Toolkit for simple counterfactuals based on a spatial equilibrium framework in the spirit of Glaeser & Gottlieb (2009)

(c) Gabriel M. Ahlfeldt

Version 0.9, 2024-02

General remarks:

This toolkit allows for simple counterfactual evaluations of the effect of changes in fundamental productivity, quality of life, or effective land supply on employment, wage, and housing rent in a spatial equilibrium framework a la Glaeser & Gottlieb (2009). The mapping from the model's primitives to the endogenous objects used in the code is developed in the teaching materials for the 2024 course "Quantitative Spatial Economics" taught to students of Humboldt University and the Berlin School of Economics, which, in turn, build on Felipe Carrozi's 2023 lecture on the Rosen-Roback framework. All programs have been written using Stata 18. However, the code should also run on earlier versions. Programs do not use user-written ado files. Original Stata code available from GitHub.

Glaeser, E., J. Gottlieb (2009): The Wealth of Cities: Agglomeration Economies and Spatial Equilibrium in the United States. Journal of Economic Literature 2009, 47(4). http://www.aeaweb.org/articles.php?doi=10.1257/jel.47.4.983

HTML implementation

Below is a html implementation of the toolkit.  Please enter the changes to the fundamentals of the city you wish to evaluate in log units. The program will then return the changes in endogenous outcomes you may expect, in log units. The html implementation uses the following paramater values: Inverse labour demand elasticity: -0.2; labour input share: 0.66; share of floor space in consumption: 0.33; height elasticity of construction cost: 1.5. In the original Stata code all parameter values can be adjusted.