This paper evaluates the impact of structural funds on the convergence process between 145 European regions over 1989-1999. The presence of spillover effects is investigated with spatial econometric methods, which assess the impact of the funds on the targeted region and its neighbours. We also control the potential endogeneity problem in the estimation of their impact. Our estimation results indicate that significant convergence takes place, but that the funds have no impact on it. Simulation experiments show how investments targeted to the peripheral regions never spill over to their neighbours, which calls for a reconsideration of current regional policy tools. JEL classification: C14, O52, R11, R15

Hedonic house price models typically impose a constant price structure on housing characteristics throughout an entire market area. However, there is increasing evidence that the marginal prices of many important attributes vary over space, especially within large markets. In this paper, we compare two approaches to examine spatial heterogeneity in housing attribute prices within the Tucson, Arizona housing market: the spatial expansion method and geographically weighted regression (GWR). Our results provide strong evidence that the marginal price of key housing characteristics varies over space. GWR outperforms the spatial expansion method in terms of explanatory power and predictive accuracy.

The allocation of Structural Funds, the most important component of the European Union (EU) cohesion policy, is subject to intense bargaining between national governments and across layers of political governance. Using Structural Funds data for each cohesion objective over 1989-99, we examine which variables, economic and political, determine the actual funds allocation. We test our hypotheses with a Tobit model that accounts for the two-stage allocation process and our limited dependent variables. Our results indicate that economic criteria are not the only determinants of funds allocation. Indeed, we find that the political situation within a country and a region and the relations between various layers of governance influence the allocation process. This article is also the only study to measure the impact of additional funds provided by the region or the country itself, and to differentiate the analysis by cohesion objective. Copyright (c) 2010 The Author(s). Journal compilation (c) 2010 Blackwell Publishing Ltd.

Abstract:The efforts of the European Commission to reduce regional inequalities over its territory continues to attract the attention of researchers. The purpose of this paper is to perform an exploratory investigation of the relationship between the spatial distribution of regional income and of regional development funds among 145 European regions over 1989-1999. Using a set of tools of spatial statistics, we first detect the presence of global and local spatial autocorrelation in the distribution of regional per capita incomes, traducing that rich (poor) regions tend to be clustered close to other rich (poor) regions, and in the distribution of regional growth rate and regional funds. Second, the results of LISA statistics conclude to the presence of spatial heterogeneity in the form of two spatial clusters of rich and poor regions over the decade, highlighting the persistence of a significant core-periphery pattern among European regions. Finally, an exploratory analysis reveals a negative correlation between growth and initial income, that tends to indicate β -convergence. A positive relationship between regional growth and structural funds is identified among the significant results as well. Only Andalucia, Galicia and Sterea Ellada show atypical linkages. These results suggest that further research should include spatial effects and the distribution of regional funds in the spatial econometric estimation of regional convergence in Europe.

O18, R11, R58,