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Handbook of

Manfred M. Fischer • Peter Nijkamp Editors

Handbook of Regional Science

With 219 Figures and 59 Tables Editors Manfred M. Fischer Institute for Economic and GIScience Vienna University of and Business Vienna Austria

Peter Nijkamp Department of Spatial Economics Free University Amsterdam The Netherlands

ISBN 978-3-642-23429-3 ISBN 978-3-642-23430-9 (eBook) ISBN 978-3-642-23431-6 (print and electronic bundle) DOI 10.1007/978-3-642-23430-9 Springer Heidelberg New York Dordrecht London

Library of Congress Control Number: 2013936795

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Printed on acid-free paper

Springer is part of Springer ScienceþBusiness Media (www.springer.com) Section Editors

Regional Housing and Labor Markets Mark Partridge Ohio State University, Columbus, OH, USA Alessandra Faggian AED Economics Department, Ohio State University, Columbus, OH, USA

Regional Jacques Poot National Institute of Demographic and Economic Analysis, University of Waikato, Hamilton, New Zealand

Innovation and Regional Roberta Capello Dipartimento BEST - Building Environment Science and Technology, Milano, Italy

New and Evolutionary Economic Geography Andre´s Rodrı´guez-Pose Department of Geography and Environment, London School of Economics, London, UK

Location and Interaction Piet Rietveld Department of Economics, Free University Amsterdam, Amsterdam, The Netherlands

Environmental and Natural Resources Amitrajeet A. Batabyal Department of Economics, Rochester Institute of Technology, Rochester, NY, USA

Spatial Analysis and Geocomputation Paul Longley Department of Geography, University College London, London, UK

v vi Section Editors

Spatial Peter Congdon School of Geography, Queen Mary, University of London, London, UK

Spatial James P. LeSage Finance & Economics, Texas State University-San Marcos, San Marcos, TX, USA Contents

Volume 1

Section I Regional Housing and Labor Markets ...... 1 1 Migration and Labor Opportunities ...... 3 Michael J. Greenwood 2 Spatial Equilibrium in Labor Markets ...... 17 Philip E. Graves 3 Labor Market Theory and Models ...... 35 Stephan J. Goetz 4 Job Search Theory ...... 59 Alessandra Faggian 5 Commuting, Housing, and Labor Markets ...... 75 Jan Rouwendal 6 Spatial Mismatch, Poverty, and Vulnerable Populations ...... 93 Laurent Gobillon and Harris Selod 7 Regional and ...... 109 Francesca Mameli, Vassilis Tselios, and Andre´s Rodrı´guez-Pose 8 , and Housing Markets ...... 125 Dionysia Lambiri and Antonios Rovolis 9 Housing Choice, Residential Mobility, and Hedonic Approaches ...... 147 David M. Brasington

Section II Regional Economic Growth ...... 167 10 Neoclassical Regional Growth Models ...... 169 Maria Abreu 11 and Regional Extensions ...... 193 Zoltan Acs and Mark Sanders

vii viii Contents

12 Incorporating Space in the Theory of Endogenous Growth: Contributions from the New Economic Geography ...... 213 Steven Bond-Smith and Philip McCann 13 Computable Models of Static and Dynamic Spatial ...... 237 Amir H. Meimand and Terry L. Friesz 14 Demand-Driven Theories and Models of Regional Growth ..... 259 William Cochrane and Jacques Poot 15 The Measurement of Regional Growth and Wellbeing ...... 277 Philip S. Morrison 16 Regional Growth and Empirics ...... 291 Julie Le Gallo and Bernard Fingleton 17 The Rise of Skills: , the Creative Class, and Regional Development ...... 317 Charlotta Mellander and Richard Florida 18 Infrastructure and Regional Economic Growth ...... 331 Arthur Grimes 19 Spatial for Growth and Equity ...... 353 Sandy Dall’erba and Irving Llamosas-Rosas

Section III Innovation and Regional Economic Development ...... 373 20 The Geography of Innovation ...... 375 Edward J. Malecki 21 Generation and Diffusion of Innovation ...... 391 Borje€ Johansson 22 Knowledge Flows, Knowledge , and Regional Economic Development ...... 413 Charlie Karlsson and Urban Gra˚sjo€ 23 Clusters, Local Districts, and Innovative Milieux ...... 439 Michaela Trippl and Edward M. Bergman 24 Systems of Innovation and the Learning ...... 457 Philip Cooke 25 Cities, Knowledge, and Innovation ...... 475 Frank G. van Oort and Jan G. Lambooy 26 Networks in the Innovation Process ...... 489 Emmanouil Tranos Contents ix

Volume 2

Section IV New Economic Geography and Evolutionary Economic Geography ...... 505 27 Classical Contributions: Von Thunen,€ Weber, Christaller, Losch€ ...... 507 Roberta Capello 28 Schools of Thought on Economic Geography, Institutions, and Development ...... 527 Philip McCann 29 New Economic Geography: Past and Future ...... 539 Carl Gaigne´ and Jacques-Franc¸ois Thisse 30 New Economic Geography: Endogenizing Location in an International Model ...... 569 Steven Brakman, Harry Garretsen, and Charles van Marrewijk 31 Evolutionary Economic Geography and Relational Geography ...... 591 Harald Bathelt and Peng-Fei Li 32 and the Spatial : A Key Concept in Retrospect and Prospect ...... 609 Ron Martin 33 Agglomeration and Jobs ...... 631 Gilles Duranton 34 Changes in Economic Geography Theory and the Dynamics of Technological Change ...... 649 Riccardo Crescenzi 35 Geographical Economics and Policy ...... 667 Henry G. Overman

Section V Location and Interaction ...... 683 36 Travel Behavior and Travel Demand ...... 685 Kenneth Button 37 Activity-Based Analysis ...... 705 Harvey J. Miller 38 Analysis ...... 725 Nigel Waters 39 Land-Use Transport Interaction Models ...... 741 Michael Wegener x Contents

40 Network Equilibrium Models for Urban Transport ...... 759 David Boyce 41 Supply Chains and Transportation Networks ...... 787 Anna Nagurney 42 Complexity and Spatial Networks ...... 811 Aura Reggiani 43 Market Areas and Competing Firms: in Perspective ...... 833 Folke Snickars 44 Factor Mobility and Migration Models ...... 851 Johannes Brocker€ 45 Interregional Input– Models ...... 875 Jan Oosterhaven and Geoffrey J. D. Hewings 46 Interregional Trade Models ...... 903 Geoffrey J. D. Hewings and Jan Oosterhaven

Section VI Environmental and Natural Resources ...... 927 47 Dynamic and Stochastic Analysis of Environmental and Natural Resources ...... 929 Yacov Tsur and Amos Zemel 48 Game Theoretic Modeling in Environmental and Resource Economics ...... 951 Hassan Benchekroun and Ngo Van Long 49 Economic Valuation: Concepts and Empirical Methods ...... 973 John B. Loomis 50 The Hedonic Method for Valuing Environmental and Quality ...... 993 Philip E. Graves 51 Materials Balance Models ...... 1009 Gara Villalba Me´ndez and Laura Talens Peiro´ 52 Spatial Environmental and Natural Resource Economics ...... 1029 Amy W. Ando and Kathy Baylis 53 Climate Change and Regional Impacts ...... 1049 Daria A. Karetnikov and Matthias Ruth 54 Urban and Regional ...... 1071 Emily Talen 55 Population and the Environment ...... 1085 Jill L. Findeis and Shadayen Pervez Contents xi

Volume 3

Section VII and Geocomputation ...... 1105 56 The Practice of Geographic ...... 1107 Michael F. Goodchild and Paul A. Longley 57 Geospatial Analysis and Geocomputation: Concepts and Modeling Tools ...... 1123 Michael de Smith 58 Geovisualization ...... 1137 Ross Maciejewski 59 Scale, Aggregation, and the Modifiable Areal Unit Problem ...... 1157 David Manley 60 Spatiotemporal Data Mining ...... 1173 Tao Cheng, James Haworth, Berk Anbaroglu, Garavig Tanaksaranond and Jiaqiu Wang 61 Bayesian Spatial Analysis ...... 1195 Chris Brunsdon 62 Cellular Automata and Agent-Based Models ...... 1217 Keith C. Clarke 63 Spatial Microsimulation ...... 1235 Alison J. Heppenstall and Dianna M. Smith 64 Spatial Network Analysis ...... 1253 David O’Sullivan

Section VIII Spatial Statistics ...... 1275 65 Spatial Data and Statistical Methods: A Chronological Overview ...... 1277 Robert Haining 66 Exploratory Spatial Data Analysis ...... 1295 Jurgen€ Symanzik 67 Spatial Clustering and Autocorrelation in Health Events ...... 1311 Geoffrey Jacquez 68 Ecological Inferences and Multilevel Studies ...... 1335 Mariana Arcaya and S. V. Subramanian 69 Spatial Dynamics and Space-Time Data Analysis ...... 1365 Sergio J. Rey xii Contents

70 Spatial Sampling ...... 1385 Eric M. Delmelle 71 Spatial Models Using Laplace Approximation Methods ...... 1401 Virgilio Go´mez-Rubio, Roger S. Bivand, and Ha˚vard Rue 72 Bayesian Spatial Statistical Modeling ...... 1419 Peter Congdon 73 Geographically Weighted Regression ...... 1435 David C. Wheeler 74 Geostatistical Models and Spatial Interpolation ...... 1461 Peter M. Atkinson and Christopher D. Lloyd 75 Spatial Autocorrelation and Spatial Filtering ...... 1477 Daniel Griffith and Yongwan Chun

Section IX Spatial Econometrics ...... 1509 76 Cross-Section Spatial Regression Models ...... 1511 Julie Le Gallo 77 Interpreting Spatial Econometric Models ...... 1535 James P. LeSage and R. Kelley Pace 78 Maximum Likelihood Estimation ...... 1553 R. Kelley Pace 79 Bayesian MCMC Estimation ...... 1571 Jeffrey A. Mills and Olivier Parent 80 Instrumental Variables/Method of Moments Estimation ...... 1597 Ingmar R. Prucha 81 Limited and Censored Dependent Variable Models ...... 1619 Xiaokun (Cara) Wang 82 Spatial Panel Models ...... 1637 J. Paul Elhorst 83 Spatial Econometric OD-Flow Models ...... 1653 Christine Thomas-Agnan and James P. LeSage Author ...... 1675 Subject Index ...... 1703 Contributors

Maria Abreu University of Cambridge, Cambridge, UK Zoltan Acs School of , George Mason University, Fairfax, VA, USA Berk Anbaroglu SpaceTimeLab, Department of Civil, Environmental and Geomatic Engineering, University College London, London, UK Amy W. Ando Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, Champaign, IL, USA Mariana Arcaya Department of Society, Human Development and Health, Harvard School of , Harvard University, Boston, MA, USA Peter M. Atkinson Geography and Environment, University of Southampton, Southampton, UK Harald Bathelt Department of and Department of Geography & Program in , University of Toronto, Toronto, ON, Canada Kathy Baylis Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, Champaign, IL, USA Hassan Benchekroun Department of Economics and CIREQ, McGill University, Montre´al, QC, Canada Edward M. Bergman Institute for the Environment and Regional Development, Vienna University of Economics and Business, Vienna, Austria Roger S. Bivand Department of Economics, NHH Norwegian School of Economics, Bergen, Norway Steven Bond-Smith Department of Economics, University of Waikato, Hamilton, New Zealand David Boyce Department of Civil and Environmental Engineering, Northwestern University, Evanston, IL, USA Steven Brakman Faculty of Economics and Business, University of Groningen, AV, Groningen, The Netherlands

xiii xiv Contributors

David M. Brasington Department of Economics, University of Cincinnati, Cincinnati, OH, USA Johannes Brocker€ Institute of Regional Research, Department of Economics, University of Kiel, Kiel, Germany Chris Brunsdon School of Environmental Sciences, University of Liverpool, Liverpool, UK Kenneth Button School of Public Policy, George Mason University, MS-3B1, Arlington, VA, USA Roberta Capello Department Architecture, and Construction Engineering A.B.C., Politecnico di Milano, Milan, Italy Tao Cheng SpaceTimeLab, Department of Civil, Environmental and Geomatic Engineering, University College London, London, UK Yongwan Chun Geospatial Information Sciences, School of Economic, Political and Policy Sciences, University of Texas at Dallas, Richardson, TX, USA Keith C. Clarke Department of Geography, University of California, Santa Barbara, Santa Barbara, CA, USA William Cochrane School of Social Sciences, University of Waikato, Hamilton, New Zealand Peter Congdon School of Geography, Queen Mary University of London, London, UK Philip Cooke Centre for Advanced Studies, Cardiff University, Cardiff, UK Riccardo Crescenzi London School of Economics, London, UK Sandy Dall’erba And Spatial Modeling (REASM) Labora- tory, University of Arizona, Tucson, AZ, USA Eric M. Delmelle Department of Geography and Earth Sciences, University of North Carolina at Charlotte, Charlotte, NC, USA Gilles Duranton Department of Economics, University of Toronto, Toronto, ON, Canada J. Paul Elhorst Department of Economics, Econometrics and Finance, University of Groningen, Groningen, The Netherlands Alessandra Faggian AED Economics, Ohio State University, Columbus, OH, USA Jill L. Findeis Division of Applied Social Sciences, University of Missouri- Columbia, Population Research Institute, Pennsylvania State University, Columbia, MO, USA Contributors xv

Bernard Fingleton Department of Economics, University of Strathclyde, Glasgow, Scotland, UK Richard Florida Rotman School of , University of Toronto, Toronto, ON, Canada Terry L. Friesz Department of Industrial and Manufacturing Engineering, Pennsylvania State University, University Park, PA, USA Carl Gaigne´ INRA, UMR1302 SMART, Rennes, France Julie Le Gallo CRESE, Universite´ de Franche-Comte´, Besanc¸on, France Harry Garretsen Faculty of Economics and Business, University of Groningen, AV, Groningen, The Netherlands Laurent Gobillon Institut National d’Etudes De´mographiques (INED), PSE and CEPR, Paris, France Stephan J. Goetz Northeast Regional Center for Rural Development and Depart- ment of , and , Pennsylvania State University, University Park, PA, USA Virgilio Go´mez-Rubio Department of Mathematics, School of Industrial Engineering-Albacete, University of Castilla-La Mancha, Albacete, Spain Michael F. Goodchild Center for Spatial Studies and Department of Geography, University of California, Santa Barbara, CA, USA Philip E. Graves Department of Economics, University of Colorado, Boulder, CO, USA Michael J. Greenwood Department of Economics, University of Colorado, Boulder, CO, USA Daniel Griffith Geospatial Information Sciences, School of Economic, Political and Policy Sciences, University of Texas at Dallas, Richardson, TX, USA Arthur Grimes Motu Economic and Public Policy Research, Wellington, New Zealand Urban Gra˚sjo€ Economics and Informatics, University West, Trollh€attan, Sweden Robert Haining Department of Geography, University of Cambridge, Downing Place, Cambridge, UK James Haworth SpaceTimeLab, Department of Civil, Environmental and Geomatic Engineering, University College London, London, UK Alison J. Heppenstall School of Geography, University of Leeds, Leeds, UK Geoffrey J. D. Hewings Regional Economics Applications Laboratory, Univer- sity of Illinois, Urbana-Champaign, IL, USA xvi Contributors

Geoffrey Jacquez SUNY at Buffalo, Buffalo, NY, USA BioMedware, Ann Arbor, MI, USA Borje€ Johansson Department of Economics, Jonk€ oping€ International Business School (JIBS), Jonk€ oping,€ Sweden Daria A. Karetnikov University of Maryland, College Park, MD, USA Charlie Karlsson Jonk€ oping€ International Business School, Jonk€ oping€ Univer- sity, Jonk€ oping,€ Sweden Dionysia Lambiri Geography and Environment, University of Southampton, Highfield, Southampton, UK Jan G. Lambooy Department of Economic Geography, Faculty of Geociences, Utrecht University, Utrecht, The Netherlands Julie Le Gallo CRESE, Universite´ de Franche-Comte´, Besanc¸on, France James P. LeSage Department of Finance and Economics, Texas State University – San Marcos, San Marcos, TX, USA Peng-Fei Li Department of Urban & Regional Economy and Institute of China Innovation, East China Normal University, Shanghai, People’s Republic of China Irving Llamosas-Rosas Department of Economics, University of Arizona, Tucson, USA Christopher D. Lloyd School of Environmental Sciences, University of Liverpool, Liverpool, UK Ngo Van Long Department of Economics and CIREQ, McGill University, Montre´al, QC, Canada Paul A. Longley Department of Geography, University College London, London, UK John B. Loomis Department of Agricultural and Resource Economics, Colorado State University, Fort Collins, CO, USA Ross Maciejewski Arizona State University, Tempe, USA Edward J. Malecki Department of Geography, Ohio State University 1036 Derby Hall, Columbus, OH, USA Francesca Mameli Dipartimento di Scienze Economiche e Aziendali and CRENoS, Universita` degli Studi di Sassari, Sassari, Italy David Manley School of Geographical Sciences, University of Bristol, Bristol, UK Charles van Marrewijk Utrecht University School of Economics, University of Utrecht, TC, Utrecht, The Netherlands Ron Martin Department of Geography, University of Cambridge, Cambridge, UK Contributors xvii

Philip McCann Department of Economic Geography, University of Groningen, Groningen, The Netherlands Amir H. Meimand Department of Industrial and Manufacturing Engineering, Pennsylvania State University, University Park, PA, USA Charlotta Mellander Jonk€ oping€ International Business School, Jonk€ oping,€ Sweden Harvey J. Miller Department of Geography, University of Utah, Salt Lake City, UT, USA Jeffrey A. Mills Department of Economics, University of Cincinnati, Cincinnati, OH, USA Philip S. Morrison School of Geography, Environment and Earth Sciences, Victoria University of Wellington, Wellington, New Zealand Anna Nagurney Department of Finance and Operations Management, Isenberg School of Management, University of Massachusetts, Amherst, MA, USA Jan Oosterhaven Faculty of Economics and Business, University of Groningen, Groningen, The Netherlands David O’Sullivan School of Environment, University of Auckland, Auckland, New Zealand Henry G. Overman Spatial Economics Research Centre and Department of Geography and Environment, London School of Economics and Political Science, London, UK R. Kelley Pace Department of Finance, E.J. Ourso College of Business Adminis- tration, Louisiana State University, Baton Rouge, LA, USA Olivier Parent Department of Economics, University of Cincinnati, Cincinnati, OH, USA Shadayen Pervez Division of Applied Social Sciences, University of Missouri- Columbia, Population Research Institute, Pennsylvania State University, Columbia, MO, USA Jacques Poot National Institute of Demographic and Economic Analysis, Univer- sity of Waikato, Hamilton, New Zealand Ingmar R. Prucha Department of Economics, University of Maryland, College Park, MD, USA Aura Reggiani Department of Economics, University of Bologna, Bologna, Italy Sergio J. Rey GeoDa Center for Geospatial Analysis and Computation, School of Geographical Sciences and , Arizona State University, Tucson, AZ, USA xviii Contributors

Andre´s Rodrı´guez-Pose Department of Geography and Environment, London School of Economics, London, UK Jan Rouwendal Department of Spatial Economics, VU University, Amsterdam, The Netherlands Antonios Rovolis Department of Economic and Regional Development, Panteion University of Athens, Kallithea, Greece Ha˚vard Rue Department of Mathematical Sciences, Norwegian University of Science and Technology, Trondheim, Norway Matthias Ruth Department of Civil and Environmental Engineering, School of Public Policy and Urban Affairs, Northeastern University, College Park, USA Mark Sanders Utrecht School of Economics, Utrecht, The Netherlands Harris Selod The , PSE-INRA and CEPR, Washington, DC, USA Dianna M. Smith Queen Mary University, London, UK Michael de Smith Department of Geography, University College London, London, UK Folke Snickars Department of Urban Planning and the Environment, KTH Royal Institute of Technology, Stockholm, Sweden S. V. Subramanian Department of Society, Human Development and Health, Harvard School of Public Health, Harvard University, Boston, MA, USA Jurgen€ Symanzik Department of Mathematics and Statistics, Utah State University, Logan, UT, USA Emily Talen Arizona State University, Tempe, AZ, USA Laura Talens Peiro´ Social Innovation Centre, INSEAD, Fontainebleau, France Garavig Tanaksaranond SpaceTimeLab, Department of Civil, Environmental and Geomatic Engineering, University College London, London, UK Jacques-Franc¸ois Thisse CORE, Universite catholique de Louvain, Louvain–la– Neuve, Belgium CMSE, NRU–Higher School of Economics, Saint–Petersburg, Russia Christine Thomas-Agnan G.R.E.M.A.Q., Toulouse School of Economics, Toulouse, France Emmanouil Tranos Department of Spatial Economics, VU University, Amsterdam, The Netherlands Michaela Trippl Department of , Lund University, Lund, Sweden Contributors xix

Vassilis Tselios Geography and Environment, University of Southampton, Southampton, UK Yacov Tsur Department of Agricultural Economics and Management, Hebrew University of Jerusalem, Rehovot, Israel Frank G. van Oort Department of Economic Geography, Faculty of Geociences, Utrecht University, Utrecht, The Netherlands Gara Villalba Me´ndez Universitat Auto`noma de Barcelona, Bellaterra, Spain Jiaqiu Wang SpaceTimeLab, Department of Civil, Environmental and Geomatic Engineering, University College London, London, UK Xiaokun (Cara) Wang Department of Civil and Environmental Engineering, Rensselaer Polytechnic Institute, Troy, NY, USA Nigel Waters Department of Geography and Geoinformation Science, George Mason University, Fairfax, VA, USA Michael Wegener Spiekermann & Wegener, Urban and Regional Research, Dortmund, Germany David C. Wheeler Department of Biostatistics, Virginia Commonwealth Univer- sity, Richmond, VA, USA Amos Zemel Department of Solar Energy and Environmental Physics, Jacob Blaustein Institutes for Desert Research, Ben Gurion University of the Negev, Sede Boker Campus, Israel

Regional Science at Full Gallop: Editorial Introduction

Manfred M. Fischer and Peter Nijkamp

1 Aims and Scope

This Springer Handbook of Regional Science is meant to be a major reference work. It brings systematically together a varied set of major contributions to regional science that may be considered to be landmarks of advanced collective knowledge in the field. It was conceived to provide an understanding of major developments in regional science, in theory, methodology, and application. The various contribu- tions are not purely theoretical or applied in nature, but offer a tertiary literature overview of advances in the field over the past few decades. The growth pace of regional science has been so fast that it is highly unlikely that a single scholar could have command of either the full spectrum of technical research tools, the broad multidimensional array of theoretical contributions, or the varied range of opera- tional frameworks and studies in regional science. Regional science has over the past half a century indeed turned into a broad multidisciplinary orientation on regional and urban issues, combining – and being a complement to – regional economics, social and economic geography, , transportation science, , political science, and planning theory. Regional science has also developed a powerful scientific toolbox that is nowadays being used in many spatial analyses. A major aim of the present handbook is to make major developments in regional science accessible to a broad set of students, researchers, practitioners, and teachers, as well as to provide a strategic source of reference for many interested scientists in the years to come. It should be noted that regional science has – apart from a few notable exceptions – not been served very well with advanced textbooks, which makes access of regional science theory and method to advanced students and interested scholars rather difficult. This multi-volume handbook aims to provide a genuine and appealing entry to a rich and expanding scientific field, in which the interface of social sciences and space is highlighted from an analytical perspective.

xxi xxii M.M. Fischer and P. Nijkamp

2 A Short History

Regional science as a broadly recognized scientific domain has been brought to fruition only over the last 50 years. This does not imply that in previous periods there was no in spatial issues. On the contrary, already the grandfather of economics, , analyzed the relationship between location and trade, by emphasizing the importance of accessibility in spatial connectivity. And many other classical scholars, e.g., Ricardo, Malthus, Quesnay, and several others, have addressed – often implicitly – important issues of the space-economy. Of course, there is also a range of recognized predecessors of regional science, in particular, von Thunen,€ Weber, Palander, Predohl,€ and Losch.€ But the real history of regional science started with the seminal contributions of , who laid the foundation for a rigorous analytically oriented regional science since the mid 1950s. The framework developed by him had a theoretical foun- dation, a strong methodological orientation, and a strong emphasis on applied modelingofreal-worldphenomenaandprocesses, seen from a multidisciplinary perspective. It is noteworthy that Isard did not only provide original contributions to regional science in a strict sense, but also to ecological science, transportation science, and even conflict management. His approach is a perfect example of the multidis- ciplinary nature of regional science. This interdisciplinary character is also the key feature of the present handbook. Contributors of the various chapters originate from several disciplines which all together make up the constituents of regional science. These contributions follow the strict methodological requirements imposed in the early genesis of regional science, in which quantitative analysis and multidisciplinary approach are key. A major recurrent theme in regional science is location and agglomeration theory. Location and agglomeration derive their importance from distance frictions, of scale, and proximity and connectivity, which are inherent in the spatial behavior of economic agents (, firms, public actors). This theme forms the prominent historical perspective for regional science. And there- fore, in the next sections we will concisely address this theme.

3 Location and Agglomeration Theory

Locations and agglomerations are spatial phenomena par excellence. They were historically – next to spatial interactions, e.g., through transport or trade – the most obvious subject matters of research in regional science. And over the decades, regional science has built up a strong tradition in analytical research on the determinants or drivers of location in the space-economy. does not only include industrial location decision, but also residential location and Regional Science at Full Gallop: Editorial Introduction xxiii facility location, including the spatial interactions between locations (allocation) and the spatial concentration of activities (agglomeration). Location and agglomeration theory is concerned with the question where and why economic activity can be found. It addresses the spatial behavior of all agents, not only from a point perspective (i.e., the location), but also from a spatial pattern and geographical structure perspective (i.e., agglomerations and interdepen- dencies). Individual location decisions were already studied more than a century ago by von Thunen€ and Weber, while geographical clusters and spatial interactions were already studied by regional scientists avant la lettre (e.g., Marshall, Palander, Christaller, Predohl,€ Perroux, Myrdal, H€agerstrand, and many others). Regional science from a locational angle did not only spur innovative, theoretical, and methodological research on the space-economy but also applied policy research (e.g., on growth poles, industrial districts, etc.). This has also prompted a far- reaching research interest in regional development in a broad sense or regional economic growth in a more limited sense. Recent examples can be found in the endogenous growth theory, the New Economic Geography, or the neo-innovation theory. In the same vein, housing markets and labor markets have become foci of regional science research, often from an urban economics perspective. In this context, land rent and mobility behavior are related to modern location and agglomeration analysis. Urban dynamics – including urban sprawl and the emer- gence of the “New Urban World” – has consequently also become a prominent direction in regional science research, along with transportation research and, more recently, digital infrastructure and geoscience research. The reader will note that the present handbook does not contain a particular section devoted to location, allocation, and agglomeration. The editors have deliberately decided not to include a special section on these topics, for the simple reason that in the rich history of regional science location and agglom- eration theories have increasingly become mainstream with more integrative spatial research themes, such as regional growth, regional innovation, spatial labor and housing markets, spatial modeling, and so forth. From this perspective, there is no evident or compelling need for a dedicated location/agglomeration section. There are many contributions in this handbook that address locational issues, but often embedded in a broader spatial context. Since “location is everywhere,” the editors feel that a separate section on location is no longer warranted.

4 Organization of the Handbook

The design of this handbook follows strict logical principles. There are nine major parts (sections), each of which consists of a set of systematically organized chap- ters. Though each author is responsible for the contents of his or her chapter, xxiv M.M. Fischer and P. Nijkamp a strict review procedure has been adopted, by both the section editors and the editors-in-chief. The handbook editors and the section editors have critically reviewed each individual contribution. This has not only ensured a strict quality control on each submitted chapter, but also a functional coherence and integration of all chapters and sections. And therefore, this handbook is more than a collection of loose chapters. Clearly, in an interdisciplinary setting, a subdivision of a domain into sections and chapters is never watertight, but in our view the current structure of the handbook serves as a useful structuring of central themes in regional science. This opus contains nine overarching themes: • Regional housing and labor markets • Regional economic growth • Innovation and regional economic development • New economic geography and evolutionary economic geography • Location and interaction • Environmental and natural resources • Spatial analysis and geocomputation • Spatial statistics • Spatial econometrics These themes will now successively be discussed in a succinct way. This will be done in a rather novel way. Rather than offering summaries of each of the nine sections and of all 83 chapters of this handbook – which would be a boring and voluminous task – we will employ a so-called content cloud analysis which maps out in a visually appealing way the most prominent terms and concepts used in each individual section as well as in the handbook as a whole. A content cloud analysis is based on a systematic digital search algorithm, through which the most relevant substantive items – in terms of frequency – can be traced and identified, and next be included in a multicolor visualization, in which commonalities and frequencies of such items can be shown through color intensities and font sizes. This will be done here for all nine sections and for the entire opus, followed by a concise exposition. This way of systematizing the structure and context of this handbook offers also a key to trace cross-references through the subject index composed for this work.

5 Regional Housing and Labor Markets

Spatial housing and labor market research has been a focal point of attention in the long-standing history of regional science. Housing and labor markets are the cornerstones of regional science, as they related to both residential and firm locational behavior. They have been extensively treated in the history of spatial – urban and regional – research. The various contributions in this section extend the traditional focus in this field by including also migration, job search, poverty, real estate, and market-based evaluations. The content cloud associated with the nine chapters in this section is depicted in Fig. 1. Regional Science at Full Gallop: Editorial Introduction xxv

Fig. 1 Content cloud of the Section on “Regional Housing and Labor Market”

This content cloud contains evidently labor, housing markets, (un)employment, and (s) as prominent items. But also terms like , , mobility, households, rents, and locations and hedonic values are clearly present. This colorful spectrum appears to present a balanced treatment of concepts one might expect in a section on housing and labor markets.

6 Regional Economic Growth

Regional economic growth issues have inspired a wealth of research – both theoretically and politically oriented – on the drivers and implications of xxvi M.M. Fischer and P. Nijkamp imbalances in spatial development patterns. Recent advances from macroeconomic growth theory and from economic geography have once more highlighted the importance of studying the causes of spatial disparity phenomena, from both a spatial equilibrium perspective and real-world regional policy perspective. More recently, issues such as well-being, health, education and skills, and human capital have also been included in spatial equity and convergence discussions. The content cloud related to the second section (see Fig. 2) confirms largely the aforementioned sketch of regional economic growth issues. Next to traditional items such as income, production, or equilibrium also more recently popular concepts like knowledge, well-being, innovation, and migration appear to play a substantive role in the individual chapters of this section.

Fig. 2 Content cloud of the Section on “Regional Economic Growth” Regional Science at Full Gallop: Editorial Introduction xxvii

7 Innovation and Regional Economic Development

The third section of this handbook is devoted to innovation and regional economic development. It contains various important contributions on the spatial pattern of innovations, in combination with knowledge diffusion and absorption. Important elements are in particular externalities, innovative milieux, learning , human capital in cities, and digital infrastructures. This section offers a wealth of system- atic insights into spatial dynamics and regional development. This is confirmed by the content cloud related to this section (see Fig. 3). Keywords which stand out here are in particular: knowledge, networks, spillovers,

Fig. 3 Content cloud of the Section on “Innovation and Regional Economic Development” xxviii M.M. Fischer and P. Nijkamp and proximity. But also items such as interaction, diffusion, externalities, and learning are well represented. All in all, this section provides a collection of critical concepts that are key to a treatment of innovation and regional development.

8 New Economic Geography and Evolutionary Economic Geography

In the past decades, much attention has been devoted to new conceptualizations of spatial dynamics. The present section offers various interesting contributions on new economic geography and evolutionary economic geography. Rather than discussing whether we have here old wines in new bottles, the various chapters offer a systematic positioning of these issues in the regional science history and, more broadly, in modern economic growth theory. In this vein, also due attention is paid to institutional frameworks, to endogenous location and trade, to evolutionary perspectives and path dependencies, as well as to agglomeration externalities and the role of technological change. The wealth of information contained in the front section of this handbook is substantiated by the content cloud mapped out in Fig. 4. Items like markets, cities, agents, location, , and agglomeration dominate the scene in this content cloud, followed by important terms such as innovation, knowledge, equilibrium, proximity, and clusters. This information mapping clearly confirms the solidity of the topical choice on the theme of new economic geography and evolutionary economic geography.

9 Location and Interaction

Spatial interdependencies have always been at the heart of regional science research. Such interdependencies are clearly related in transport flows and mobility patterns, but go also much further. The present section on location and interaction does not only offer an account of travel patterns, transportation analysis, and network models, but also provides new insights into activity-based analysis, social network configurations, and spatial land-use models. This overview is then extended toward adjacent domains, such as supply chains, complex spatial systems, market areas, trade and migration, and input-output linkages. This rather compre- hensive section illustrates the rich heritage which has been gathered in the spatial modeling history in regional science. The latter observation is confirmed by the content cloud in Fig. 5, which offers a visual mapping of key concepts in the fifth section of the handbook. Clearly, transport, mobility, networks, trade, and travel are prominently present in this cloud, but also terms like complexity, social, public, time, and change show up. This indicates that this section treats a variety of relevant concepts that may be seen as essential for a section on location and interaction. Regional Science at Full Gallop: Editorial Introduction xxix

Fig. 4 Content cloud of the Section on “New Economic Geography and Evolutionary Economic Geography”

10 Environmental and Natural Resources

Environmental and natural resources have been seen as major drivers of regional development since the early history of regional science. But its importance has not changed over the past decades, partly due to the awareness of the necessity of these resources for human survival, partly due to new emerging issues such as ecological sustainability, spatial resilience, or climate change. The present section on envi- ronmental and natural resources aims to provide up-to-date insights into the xxx M.M. Fischer and P. Nijkamp

Fig. 5 Content cloud of the Section on “Location and Interaction” development of analytical tools and conceptual frameworks in this field. Important methodological advances can be found inter alia in: stochastic analyses, game- theoretic frameworks, new economic valuation methods, hedonic valuation tech- niques, and materials balance models. New angles can also be found by an explicit consideration of spatial patterns of ecological resources, climate change, urban sustainability, and population dynamics. The content cloud mapped out in Fig. 6 depicts most of the key concepts in this section on environmental and natural resources. Prominent concepts that show up in this figure are – apart from environmental – population, resources, emissions, growth, , space, and location. But also related items such as conservation, Regional Science at Full Gallop: Editorial Introduction xxxi

Fig. 6 Content cloud of the Section on “Environmental and Natural Resources” uncertainty, social, and public are present. This cloud shows that the position of environmental and natural resources is well anchored in regional science.

11 Spatial Analysis and Geocomputation

The section on spatial analysis and geocomputation offers an overview of achieve- ments in a rapidly evolving research field in regional science. It provides relevant contributions to geographic information science, geovisualization, geospatial xxxii M.M. Fischer and P. Nijkamp

Fig. 7 Content cloud of the Section on “Spatial Analysis and Geocomputation” analysis, and geocomputation. This collection of advances is complemented with a useful state-of-the-art overview on the modifiable area unit problem (MAUP), spatiotemporal data mining, and Bayesian spatial analysis. To complete this inter- esting overview, several chapters have also been added to deal with cellular automata, agent-based models, spatial microsimulation, and spatial network anal- ysis. Most of these topics have attracted major research interest in recent decades and may be seen as important contributions to the methodology of regional science. The above observations are confirmed by the information contained in the content cloud associated with this section on spatial analysis and geocomputation (see Fig. 7). Keywords in this cloud are, apart from spatial and data: network, Regional Science at Full Gallop: Editorial Introduction xxxiii distribution, space-time, attributions, graphs and maps. But also related terms play a significant role, such as: scale, visualization, location, behavior, and change. All in all, the above description suggests that this section covers a wide variety of research tools and concepts in modern regional science.

12 Spatial Statistics

Spatial statistics has become a rapidly growing research area in regional science, especially in the context of exploratory spatial data analysis. This section offers interesting horizons for new insights into spatial statistical data analysis. Spatial clustering, spatial dynamics and space-time data analysis, ecological inferences, and multilevel statistical analysis are important topics considered in this eighth section. Other advanced items that are treated in this section are inter alia: Bayesian statistical analysis, geographical weighted regression, geostatistical modeling and spatial filtering techniques, and geostatistical modeling and spatial interpolation. It is evident that this section contains a wealth of recent insights into the research potential of sophisticated statistical research techniques in regional science. These findings are in agreement with the results of the content cloud presented in Fig. 8. Apart from evident terms like regressions, spatial, or random, also various other items are presented, such as sampling, multilevel, and inference of software. In addition, relevant concepts like , variogram, eigenvectors, or neighborhood are included. This means that the present section on spatial statistics provides an extremely useful overview of the statistical toolbox of modern regional science research.

13 Spatial Econometrics

Spatial econometrics refers to the econometric toolbox applied to and adjusted specifically for spatially interdependent phenomena and processes. It has already quite a long history and gradually evolved into an important subfield within regional science. This section on spatial econometrics offers an up-to-date over- view of advances in the flourishing research domain. Next to general overviews, also various specific topics are treated here, such as maximum likelihood estimation methods, Bayesian estimation techniques, instrumental variable methods, and the like. In addition, various advanced techniques are presented as well, in particular, limited and censored dependent variable models, spatial panel models, and spatial econometric origin-destination (OD) flow models. This section forms – next to the previous sections – a balanced representation of the toolkits of quantitative regional science research. The content cloud in Fig. 9 offers a confirmation of the above-mentioned remarks. Next to emphasis on standard terms like spatial effects and spatial models, we find also a prominent position for such concepts as explanatory, distribution, xxxiv M.M. Fischer and P. Nijkamp

Fig. 8 Content cloud of the Section on “Spatial Statistics”

flows, specification, and dependence. Furthermore, also various other important terms come to the fore here, in particular: distance, interaction, neighbors, chains, destinations, lags, and spillovers. It goes without saying that this research field still shows rapid dynamics, with many more advances to come in the future.

14 Synthesis of Concepts

The Handbook of Regional Science covers a wide variety of concepts, methods, frameworks, and research tools. The terms with the highest frequency of Regional Science at Full Gallop: Editorial Introduction xxxv

Fig. 9 Content cloud of the Section on “Spatial Econometrics”

appearance through the entire handbook are summarized in the content cloud in Fig. 10. This figure offers indeed a balanced representation of the main substance issues covered by this handbook. This is further confirmed by the content cloud in Fig. 11 which is based on a systematic screening and recording of the main concepts included in the subject index of this handbook. Both figures depict largely the same type of information and may be seen as the main ingredients of this volume. xxxvi M.M. Fischer and P. Nijkamp

Fig. 10 Content cloud of the Handbook of Regional Science Regional Science at Full Gallop: Editorial Introduction xxxvii

Fig. 11 Content cloud of the subject index of the Handbook of Regional Science