TY  - JOUR
AU  - Bernard,Andrew B.
AU  - Redding,Stephen
AU  - Schott,Peter K.
AU  - Simpson,Helen
TI  - Factor Price Equalization in the UK?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9052
PY  - 2002
Y2  - July 2002
UR  - http://www.nber.org/papers/w9052
L1  - http://www.nber.org/papers/w9052.pdf
N1  - Author contact info:
Andrew B. Bernard
Tuck School of Business at Dartmouth
100 Tuck Hall
Hanover, NH  03755
Tel: 603/646-0302
Fax: 603/646-0995
E-Mail: Andrew.B.Bernard@dartmouth.edu

Stephen J. Redding
Department of Economics
and Woodrow Wilson School
Princeton University
Fisher Hall
Princeton, NJ 08544
Tel: 609/258-4016
Fax: 609/258-6419
E-Mail: reddings@princeton.edu

Peter K. Schott
Yale School of Management
135 Prospect Street
New Haven, CT 06520-8200
Tel: 203/436-4260
Fax: 203/432-6974
E-Mail: peter.schott@yale.edu

Helen Simpson
The Centre for Market and Public Organisation
Bristol Institute of Public Affairs
University of Bristol
2 Priory Road
Bristol BS8 1TX
United Kingdom
E-Mail: Helen.Simpson@bristol.ac.uk
AB  - This paper develops a general test of factor price equalization that is robust to unobserved regional productivity differences, unobserved region-industry factor quality differences and variation in production technology across industries. We test relative factor price equalization across regions of the UK. Although the UK is small and densely-populated, we find evidence of statistically significant and economically important departures from relative factor price equalization. Our estimates suggest three distinct relative factor price areas with a clear spatial structure. We explore explanations for these findings, including multiple cones of diversification, region-industry technology differences, agglomeration and increasing returns to scale.
ER  -