Geography and Microeconomics: New Data and New Findings

Yale University, 28 Hillhouse Avenue, New Haven, CT 06520-8268, USA.
Proceedings of the National Academy of Sciences (Impact Factor: 9.67). 04/2006; 103(10):3510-7. DOI: 10.1073/pnas.0509842103
Source: PubMed


The linkage between economic activity and geography is obvious: Populations cluster mainly on coasts and rarely on ice sheets. Past studies of the relationships between economic activity and geography have been hampered by limited spatial data on economic activity. The present study introduces data on global economic activity, the G-Econ database, which measures economic activity for all large countries, measured at a 1 degree latitude by 1 degree longitude scale. The methodologies for the study are described. Three applications of the data are investigated. First, the puzzling "climate-output reversal" is detected, whereby the relationship between temperature and output is negative when measured on a per capita basis and strongly positive on a per area basis. Second, the database allows better resolution of the impact of geographic attributes on African poverty, finding geography is an important source of income differences relative to high-income regions. Finally, we use the G-Econ data to provide estimates of the economic impact of greenhouse warming, with larger estimates of warming damages than past studies.

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    • "Temperature represents average monthly temperature of nations in degrees Celsius over the period 1961-1990, computed utilising the geographical mean of data from monthly temperature reported by the Geographically based Economic data (G-Econ) project (Nordhaus, 2006) at a resolution of one degree which is based on similar data that is spatially disaggregated at a ten minute resolution (New et al., 2012). Therefore, the indicator is a spatial average of the intertemporal monthly average temperature within a nation across grid cells 3 . "
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    • "The traditionalists believe that institutions dominate the exegesis of development in varied geographical spaces (Acemoglu, et al, 2002). Yet others believe that geography determines the nature of development (Faye et all, 2004; Nordhaus, 2006; Olsson and Hibbs, 2005; and Presbitero, 2006). Yet a third group refrains from taking extreme positions and endorses the role of endogeneity in determining development (Przeworski, 2004a and 2004b; Sheppard, 2011). "
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    • "The description of spatial rescaling procedure can be found in the data documentation from the Yale GEcon website, Since its existence, the GEcon data has brought a geospatial component in many social science investigations, including geographic penalty on African poverty and the economic damages caused by greenhouse warming (Nordhaus, 2006 and Tang et al., 2009). It also has been used in other environmental studies (Tang and Woods, 2008; Buhaug et al., 2009; Seo, 2011), and inequalities between ethnic groups and ethnonationalist conflict (Cederman et al., 2011). "
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