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Economic Geography: Portfolio
Michalis Avraam
June 5, 2003Economic Geography: Portfolio 1
Contents
1 Personal Introduction 3
2 The Evolution of Economic Geography 3
2.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Chisholm’s Handbook of Commercial Geography, 1937 . . . . . . . . . . . . . . . 4
2.3 Economic Geography, 1963 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.4 The World Economy: Resources, Location, Trade and Development, 1998 . . . . . 4
2.5 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3 Population Distribution: Cyprus 5
3.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.2 Brief Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.3 Graphical Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.4 Data Used . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4 Location Quotient: Education Level at two major Technological Centers 7
4.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.2 Education Location Quotient . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.3 Equations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5 Allocation of Land Around a Central Market 8
5.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.2 Completing the model with given aggregate values . . . . . . . . . . . . . . . . . 9
5.2.1 Table I: Given Values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.2.2 Table II: Calculated Values . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.2.3 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.3 Altering aggregate values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.3.1 Table III: New Values . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.3.2 Table IV: Re–calculated Values . . . . . . . . . . . . . . . . . . . . . . . 10
5.3.3 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6 Spatial Competitions, The case of Wal–Mart and True Value hardware 10
6.1 Combined Market Matrix for W and True Value Hardware . . . . . . . . . 11
6.2 Matrix Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.3 Predictability in Decision Making . . . . . . . . . . . . . . . . . . . . . . . . . . 11
7 Organizational Geographic Information: The World Trade Organization 12
7.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.2 Available Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
June 5, 2003Economic Geography: Portfolio 2
8 Conclusions 14
References 15
June 5, 2003Economic Geography: Portfolio 3
1 Personal Introduction
Majoring in Geography, I found myself interested in various fields relating to the subject. Eco-
nomic, Political and Cultural Geography are some of the sub–fields that drove me into the field,
yet I chose to follow the Geographic Information Systems (GIS) concentration, and that for a
reason.
As I come from a foreign country, my concept for Geography is far different. For me, some-
thing cannot be Geographic unless it can be represented on a map. And through GIS, I have
managed to combine my interests in a visual way. Through the various classes I have completed in
Geography, one thing I found in common is the spatial element, which can usually be represented
through maps, especially with the help of GIS.
My expectations from this specific Economic Geography classes is to gain a further understand-
ing on the relations between Economic decisions and space. Apart from that, I want to receive an
insight on how technology (mainly GIS) can be used to “enhance” spatial economic decisions,
reduce uncertainty and provide productive models that can fit with the known framework used.
I come to this class bringing my knowledge of quite a few foreign cultures, which indeed help
greatly in the comparative aspect of the class. Apart from that, I have knowledge of computer pro-
gramming, mainly in computational mathematics through various programming languages. This I
believe can benefit me, as well as the class in general, to further understand the role of technology
in decision making.
The rest of the portfolio describes my brief journey through the realm of Economic Geography,
showing the work I have done in my various stops.
2 The Evolution of Economic Geography
2.1 Introduction
Economic Geography, as all concentration of Geography, has seen many changes through the past
century. Many aspects has changed as the world moved to a more globalized world system with the
help of technological breakthroughs. Those very technological breakthroughs did not just change
the way we study Economic Geography, they changed the world economy itself. Whether you
want to look at production means, trade means or even ways to exchange capital and ideas, the
change of the past century has been bigger that the change of the last millenium. This evident in
the corresponding textbooks concerning Economic Geography, therefore I will study three of them
at various stages of the past century and indicate the changes.
June 5, 2003Economic Geography: Portfolio 4
2.2 Chisholm’s Handbook of Commercial Geography, 1937
This book was written in 1889 by L. Dudley Stamp, with the latest revision written in 1932. As
such, the focus of the book is Commodities, which is encountered in all chapters. There is little
mention of the production and exchange of commodities, but there are large sections dedicated on
products by climate, probably explaining what is grown and where. There is mention of minerals,
fisheries and manufactured articles, which is quite short as well. But the main focus is given in
the regional geography of Europe (with 265 pages) and the American continent (with 104 pages).
This is obviously a vast description of economic commodities and their geographic location, with
little focusing on other geographic processes, like transportation.
2.3 Economic Geography, 1963
John W. Alexander wrote his book in the beginning of the ne globalized order. This is evident
from the contents of the book, where we encounter more terms like ?Commercial Bioculture?
and ?Manufacturing?. The main focus is manufacturing this time, yet transportation and trade is
still a section with limited coverage. The new entry in the list though is the Tertiary Sector of
the economy, which played an important role in economic development in the past few decades.
There is also a new mention of ?Location Theory? and ?Areal Development?. Obviously this book
corresponds to a more modern image of the world, yet the emphasis is not in the elements that
form Economic Geography today.
2.4 The World Economy: Resources, Location, Trade and Development,
1998
The above book, written by Frederick P. Stutz is the latest one. The immidiate change one can
notice is the ?new? terminology used. The first chapter mentions Globalization and many of other
chapters mention the ?World Economy? in their titles. There is less detail on commodities and
manufacturing is specialized into the spatial component of it, making this book a representative of
Economic Geography today. Interrelations are constantly mentioned and used, as well as technol-
ogy, which is a major theme in every chapter.
2.5 Conclusion
Modern day Economic Geography evolved to encompass the new realities of the world today. The
main focus shifted from commodities to what makes capital flow and technology. Yet the spatial
factors remain constant. The difference is how and where are applied this time.
June 5, 2003Economic Geography: Portfolio 5
3 Population Distribution: Cyprus
3.1 Introduction
Economic elements are directly related to population. The working force of each region is defined
by the population distribution by age, and is an important element in understanding economic
processes, especially at the political entity scales. A case study below for the island of Cyprus is
an example of how the study of demographics can affect economic geography.
3.2 Brief Description
For one to better understand the population distribution of Cyprus, it is clearly best to learn about
the recent past (of at least the past century). The island has been through a number of wars in the
past century, making the distribution by gender uneven. Throughout all the age groups, the female
population is higher than that of the male population, with the exception of the younger generation
after the last war (up to 24 years of age). The wars affected the number of the male population to
a certain degree, and in some cases, the female population is 25 per-cent higher than the male one
(see 2).
As Cyprus had the unfortunate past of taking part in numerous wars (including World War
II, the War of Independence, numerous bombings from Turkey and the final invasion by Turkish
troops), it had to adapt to the changing demographics. While the economy was moving towards the
service sector, women found their ways into high-paying jobs, supplementing the need for more
workers. Traditional male positions were quickly covered by women (teachers, professors, clerks),
making the effects of diminishing male population diminish.
This did have minor effects in the Economy, mainly until the adaptation a patriarchic society
had to undergo to accept women supporting the family and the general economy. But Cyprus
quickly overcame all obstacles and one can see the Economic indicators for the past centuries
include only progress.
June 5, 2003Economic Geography: Portfolio 6
Figure 1: Cyprus’ Population Pyramid
3.3 Graphical Representations
3.4 Data Used
Age Male Female Total
80+ 7.8 10.7 18.5
75-79 7.2 9.1 16.3
70-74 9.6 11.8 21.4
65-69 12.2 13.8 26.0
60-64 15.3 16.1 31.4
55-59 17.3 18.2 35.3
50-54 21.5 22.0 43.5
45-49 23.2 23.4 46.6
40-44 26.1 27.3 53.4
35-39 25.3 27.4 52.7
30-34 23.2 26.1 49.3
25-29 23.9 26.1 50.0
20-24 27.1 26.5 53.6
15-19 28.7 27.1 55.8
10-14 28.0 26.2 54.2
June 5, 20035-9 27.4 26.1 53.5
0-4 22.4 21.6 44.0
Total 346.2 359.3 705.5Economic Geography: Portfolio 7
Figure 2: Cyprus’ Population Distribution
4 Location Quotient: Education Level at two major Techno-
logical Centers
4.1 Introduction
Another important element in Economic Geography is the composition of a region according to
various aspects. What makes regions rather successful in comparison to the rest of the regions is an
important factor, and the Location Quotient is one of the available tools to help us establish factors
that are densely present in a specific region, in relation with other regions. The case study below
tries to establish a connection with education and the technology sector in two different States,
Washington and California.
The technology sector has undoubtly been a booming one in the last decades in the United
States. Yet the geography of technology firms are not evenly distributed among the various states.
Many factors affected that, mainly the education level of the region as well as the capabilities of
research institutions in the region.
4.2 Education Location Quotient
Two states that have seen the technological boom are Washington and California, which are also
described as the fountains of new technologies, especially in Information Technology. Washington
is the host of companies like Microsoft, Amazon, Real Networks and many more. California on the
June 5, 2003Economic Geography: Portfolio 8
other hand is host to the famous Silicon Valley, the birthplace of major Information Technology
companies. What drove companies to locate in the region? The major research institutions are
surely a major component to such a decision, but also the education level of the members of such
states.
Compared with the national number of Bachelor’s Degree holders, both Washington and Cal-
ifornia seem to cluster more of them, with Washington having the lead, while California is close
behind. Perhaps that could be related to the number of successful tech-firms during the past years,
in which Washington seems to have the lead.
4.3 Equations
PeoplewithBachelorsDegreeinState
StatePopulation
LQ = (1)
PeoplewithBachelorsDegreeinCountry
CountryPopulation
LQ = LocationQuotientForTheStateOfWashingtonW
LQ =orTheStateOfCaliforniaC
1;632;672
0:2775;894;121
LQ = = = 1:135 (2)W 68;666;975 0:244
281;421;906
9;009;858
0:26633;871;648
LQ = = = 1:09 (3)C 68;666;975 0:244
281;421;906
5 Allocation of Land Around a Central Market
5.1 Introduction
Changing scales, Economic Geography necessarily changes the tools and models used to explain
various phenomena. How land is allocated around a central market, or city if you want, is a facet of
Economic Geography used constantly to choose the appropriate location for various activities. The
last century saw many models emerging trying to exlain this very allocation. Below, an attempt
has been made using the von Th unenmodelofAllocation of Land Around a Central Market:
June 5, 2003Economic Geography: Portfolio 9
5.2 Completing the model with given aggregate values
5.2.1 Table I: Given Values
Type of Land Rent Func- Rent at Mar- Transport Distance Range of
Use tion ket R=E(p-a) Costs per from Market Highest Rent
mile (=Ef) to No–Rent Land Use
Margin from Market
k=(p-a)/f
1 R = 10 - 2.5k 10.0 2.50 4 0 - 1.7
2 R = 7 - 0.7k 7.0 0.70 10 1.7 - 5
3 R = 4.5 - 4.5 0.18 25 5 - 19
0.18k
4 R = 2 - 0.05k 2.0 0.05 40 19 - 40
5.2.2 Table II: Calculated Values
Land Use Yield (E) Price at market Cost per unit Freight rate
per unit (p) (a) per mile per
unit (f)
1 2.5 6 2 1
2 3.5 4 2 0.2
3 1.5 5 2 0.12
4 0.5 6 2 0.1
5.2.3 Interpretation
The above results are achieved through random values, yet their significance is not diminished
by that. There is no specific reason why this values should be maintained; there are numerous
values that can satisfy the information given in Table I. This byitself means that the values are not
static but could dynamically change. Yet there is one restriction, that is, they need to satisfy the
restrictions set forth in Table I.
The values of Table II can help us reach some conclusions on what could be grown in the four
land use types. Leaving the cost of producing the same, one must adjust other factors, such as price
at market and freight rates. Assuming a scale-like freight cost, with diminishing cost per mile as
you require longer transfers (which reflects reality) we see that the price of products will drop right
outside the Central Market, yet it will increase again as we move further away. These regularities
could be avoided in some way, for example, adjusting the cost of transportation will influence the
distance from the market to the No-Rent margin and will certainly affect total production costs.
The balance can still exists, but some things must give in to maintain the relationships valid.
June 5, 2003