Issue 2

In analysing the effects of economic policy in a Federal system, such as Australia, it is important to understand the interactions between the States and Territories. In particular, given that there is free movement between labour markets, to analyse economic policy it is important to understand the factors influencing inter-regional migration. In this paper we use data from 1982 to 1996 to estimate a structural econometric model of inter-regional migration. The results are then used to re-specify and calibrate the Computable General Equilibrium model MONASH-MRF. This then provides a more detailed picture of labour market responses when we subsequently simulate the response of net inter-state migration to changes in State Government spending.

JANE M. FRY, TIM R. L. FRY, MATTHEW W. PETER

Page Number - 111

In order to solve the Tokyo monopolar problem, the Japanese government has proposed a controversial policy that is to move the capital functions from Tokyo to the other places of the country. The paper presents an approach and a case study to estimate the effect of this policy on the Tokyo metropolitan area by comparing the spatial distributions of agglomeration economies and diseconomies within the area with and without the implementation of the policy. The effects are estimated by using the cubic-¬spline function approach and other regression methods, and the estimation results of two extreme cases are obtained. Firstly, in the most effective case that the removal of capital functions is supposed to give rise to the reduction of agglomeration economies and diseconomies not only at the area centre but also at all the other locations as well, such a relocation policy would reduce the total agglomeration economies resulting from the whole area to become smaller than the total diseconomies, which would lead to a decrease in the global city size of the area. Secondly, in the least effective case where it is assumed that such a removal would only cause the decreases in the agglomeration economies and diseconomies at the area centre, the relocation policy would not affect the existent balance of the total agglomeration economies and diseconomies very much (i.e., the former would still remain greater than the latter) , which means that the Tokyo monopolar situation would not be changed by the capital-moving policy. Notwithstanding these different results, both of these two cases indicate that the peripheral cities and the outskirts of the Tokyo metropolitan area would be affected by the removal of capital functions from the area centre.

XIAO-PING ZHENG

Page Number - 131

Urban economic theory predicts that differences in transportation costs across space are capitalised in land values. Costs derived from accessibility to work opportunities are fixed once a household makes a location decision, but other costs may vary. An important aspect of transport costs in many urban areas is congestion, a common feature of daily travel that drives planning prescriptions for land use, passenger transport, and system management. This study analyses the value of accessibility and congestion as reflected in residential property prices, using the hedonic estimation technique with spatial inputs. The results show that traffic congestion is not a significant determinant of house prices. Two possible interpretations of this finding are that the costs of congestion are borne entirely by commuters, and that decentralisation has weakened the capitalisation of traditional measures of employment subcentre accessibility.

ROBERT L. GUILD, GREGORY M. SCHWANN, D. CRAIG WHITEHEAD

Page Number - 153

Innovation is linked with both regional growth and the capacity of industrialised countries to compete in global markets. Regional innovation in industrial regions can result in either the emergence of new growth industries or the restructuring of older industries based on their knowledge-intensive sectors. This paper uses data from surveys of inventors and manufacturing firms in the Illawarra region of NSW, Australia, to analyse the role of innovation in Australian industrial regions. It also provides a simple regression analysis of the survey results highlighting those economic and organisational factors that are significantly related to regional R & D activity. It was found that current innovation patterns were more typical of a traditional industrial region with relatively low levels of innovation in its economic base industries. However, there was evidence that new innovative growth sectors were emerging and that creative milieu factors were important determinants of the level of innovation in the Illawarra.

ANN HODGKINSON

Page Number - 189

In this study the degree of integration members of APEC have achieved is assessed using trade intensity indices. Trade intensity indices summarise information on the geographical, social and historical links two trading nations have, along with the particular commodity composition of their trade, relative to how they trade with the rest of the world. Indices are calculated for the period 1995-97 and compared with the results of an earlier study on the region . It was found that the APEC nations have a high degree of trade intensity with one another, which is not due to the complementary nature of the goods they produce. Further, it was found that this trading pattern existed well before the establishment of the APEC agreement.

BRIAN DAVIDSON

Page Number - 213

Agriculture sells mainly to Australians. The importance of exports to Australian agriculture has been regularly overstated. This appears due, in part, to a combination of methodological errors and naive analysis. The resultant empirical estimates have been highly inaccurate and misleading. Exports, while important, are not dominant to the extent conventionally believed. Widely used, these estimates have significantly distorted both the development of rural and trade policies and the perception of policy options. Given that the conventional wisdom about Australian agriculture is wrong in significant ways, efforts are needed to establish an appropriate, methodologically sound and empirically accurate basis for policies involving agriculture, trade and rural Australia.

MARK MCGOVERN

Page Number - 229