Abstract
While the field of regional science has focused considerable attention on the role of structural change in affecting regional development, relatively modest attention has been directed to the influence of demographic-induced changes with the exception of migration and the impact of the demographic transition in developing countries. Further, most models of the regional economy portray significant disaggregation of the industrial system yet often capture the impacts of households in one sector. Increasing attention to household heterogeneity is justified on the basis of different consumption behavior by age, income and location. Since households account for 40–70 % of gross domestic product on the expenditure side, addressing the role of household heterogeneity would appear to be essential. In this paper, a review of recent work that captures this heterogeneity will be reviewed and some illustrative results from applications in Korea and the US will be provided.
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Notes
- 1.
This section draws on Wakabayashi and Hewings (2007).
- 2.
This approach is also helpful to preserve degree of freedom in a small sample, since it can save k-2 degrees of freedom in the estimation. And the expenditure function changes from \( \mathrm{C}={\displaystyle \sum_{\mathrm{k}}{\mathrm{P}}_{\mathrm{k}}{\mathrm{Q}}_{\mathrm{k}}} \) for k goods to C = Pi Qi + P−i Q−i for good i and −i.
- 3.
The welfare benefit is measured by a consumption equivalent variation (EV), which computes the consumption change required to keep the expected utility in the initial condition equal to that achieved in the new condition under immigration policies [see Park and Hewings (2009)].
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Acknowledgments
Parts of this paper draw on joint work of SangGyoo Yoon, Seryoung Park and Tae-Jeong Kim whose contributions are gratefully appreciated. The comments of an anonymous referee and the support of the National Science Foundation Grant 0818575 is gratefully acknowledged.
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Hewings, G.J.D., Kim, E. (2015). Demographic Challenges to Regional Development. In: Nijkamp, P., Rose, A., Kourtit, K. (eds) Regional Science Matters. Springer, Cham. https://doi.org/10.1007/978-3-319-07305-7_11
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