Urbanization, agriculture, and economic output: Essays in economic geography

Mesbah J Motamed, Purdue University

Abstract

This dissertation investigates three different topics related to economic geography and agricultural development. We exploit newly-available GIS data covering variables in geography, climate, demography, agriculture, and economic output to construct statistical tests concerning hypotheses related to urbanization, agricultural spillovers, and the economic importance of historic populations. Chapter 2 addresses the timing of historical transitions from rural to urban activity. Using a stylized dual-sector model, we hypothesize that urbanization occurs sooner when rural or urban productivity is higher or transport costs are lower. We test the model on worldwide data that divides the earth's surface at half-degree intervals into over 60,000 cells. From an independent estimate of each cell's rural and urban population history, we identify the date at which each cell achieves various thresholds of urbanization. Controlling for country fixed effects and neighbors' urbanization using spatial techniques, we find that the date at which each cell passes each urbanization threshold is positively associated with its suitability for cultivation, having seasonal frosts, more access to navigable waterways and lower elevation. Aggregating cells into countries, an earlier urbanization date is linked to higher per capita income today. In Chapter 3, we investigate the role of country borders as barriers to output-enhancing spillovers in agriculture in sub-Saharan Africa. Using high-resolution worldwide grid cell data covering yields for eleven major crops, we use two different approaches to test whether spatial dependencies in agricultural output are reduced by the proximity of country borders. Results from one method show that regional heterogeneity rises in the presence of country borders, implying that spillovers are impeded by borders. However, results from a complementary method reveal that neighbor-to-neighbor spillovers that cross country borders are not significantly different from within-country spillovers. Chapter 4 joins grid cell data covering historic populations and modern economic output to examine the persistence of pre-colonial settlements in determining outcomes today. The question is inspired by an influential paper by Acemoglu, Johnson, and Robinson (2002) which claims that the modern fortunes of historical European colonies are inversely proportional to their fortunes in the past. We examine whether this claim is robust to alternative explanations for income reversal by examining reversal at the grid cell level. We further find evidence that historic country populations matter more to incomes today than historic local populations. The results underscore the importance of spatial scale in economic analysis and highlight the limitations of country-level observations.

Degree

Ph.D.

Advisors

Masters, Purdue University.

Subject Area

Geography|Agricultural economics

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