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THE STRUCTURE OF METROPOLITAN FACTOR AND PRODUCT MARKETS *
Author(s) -
Crihfield John B.,
Panggabean Martin P. H.
Publication year - 1996
Publication title -
journal of regional science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.171
H-Index - 79
eISSN - 1467-9787
pISSN - 0022-4146
DOI - 10.1111/j.1467-9787.1996.tb01099.x
Subject(s) - metropolitan area , economics , profit (economics) , investment (military) , sample (material) , estimation , public sector , private sector , capital (architecture) , supply and demand , factor market , labour economics , econometrics , microeconomics , economy , economic growth , medicine , chemistry , management , archaeology , pathology , chromatography , politics , political science , law , history
. In this study we use a translog profit function and iterate seemingly unrelated regressions to estimate a system of factor demand and output supply functions for metropolitan economies. Our sample includes all metropolitan areas defined by the Census in 1977 for the period 1962 to 1982. Estimation shows that all price elasticities are elastic and that the signs are as expected. These results hold true for virtually all model specifications. Our findings indicate that federal, state, and local tax policies have significant impacts on factor demand and output supply. Public investment plays a positive and significant, but small, role in increasing output and in complementing other factors, although this influence has declined over time. Additionally, capital provided by the private sector has a substantially larger impact on output and employment than does capital provided by the public sector.