Seminar: Daniel Velasquez (University of Michigan)

Daniel is a Ph.D. Candidate in Economics at the University of Michigan. His research interests lie in International Trade, Economic Geography, Urban Economics, and Development Economics. 

His work is organized into two main agendas:

• Geography and scale externalities, which examines how the long-run distribution of economic activity across space is determined by scale externalities.
• Geography and family, which investigates how family structure and gender roles affect outcomes across space.

A recurring theme in his research is the study of spatial frictions (trade and commute costs). 

Paper: Highways, Commuting and Trade: Unpacking Suburban Growth (Link)

Abstract: I quantify the effect of U.S. Interstate Highway System on suburbanization and urban core decline via trade costs reductions beyond just commute costs reductions. I leverage variation in highway construction dates and driving time reductions to show that new highways affect both trade costs and commute costs. I find that, on average, a rise of one standard deviation in market access raises population and employment by about 10% after 40 years at the county level. However, a rise of one standard deviation in commuting access raises population and employment by about 1% after controlling for market access changes. I develop a quantitative model of trade, commuting, migration, and scale externalities. I map the model to the average effect of market and commuting access through indirect inference. Using the calibrated model, simulations show highways account for 15% of suburban growth and 33% of the decline in urban cores. I find that suburbanization and urban core decline were driven not only by reductions in commute times but also by trade cost reductions, which shifted economic activity away from urban cores.