This research disentangles spatial variation in measured productivity using NUTS3 data on earnings, GVA, and employment by occupation and sector. The factors at play in this variation are differences in sectoral composition, occupational composition, spatial price variation and variation in physical productivity on similar activities. The project has two main focuses: firstly, the decomposition of spatial variations in productivity by sector and occupation, capturing direct compositional impacts.
The second key step is econometric analysis of equilibrium effects, capturing the impact of some sectors/occupations on the measured productivity of others. In particular, attention is paid to the interaction between highly tradable sectors (typically operating in relatively few places) and non-tradable sectors (operating in most places, and with spatial price variation). The empirical analysis is then set in a new analytical framework.
Project Lead Tony Venables (The University of Manchester)
Collaborator Patricia Rice (Oxford University)
