Trade Development and Political Economy presents: Jessie Handbury

Trade Development and Political Economy Presents: Is New Economic Geography Right? Evidence from Price Data by Jessie Handbury

Speaker: Jessie Handbury (University of Pennsylvania)
Authors: Jessie Handbury (University of Pennsylvania) and David Weinstein (Columbia University)

Abstract: The agglomeration force behind the New Economic Geography literature initiated by Krugman is based on the notion that larger markets have lower price indices. Surprisingly, there have been no tests of this idea. This paper represents the first such test of Krugman (1991). Moreover, the authors develop a simple extension of the model, providing a theoretical underpinning for why residents of larger cities may have access to more tradable varieties. Using barcode price data, they find that, after controlling for store and shopping effects, residents of large cities face a lower price index and have access to more varieties of groceries.

Bio: Jessie Handbury is Assistant Professor at the Wharton School in the University of Pennsylvania. Her research interests are in international trade, urban economics and industrial organization.