Dots to boxes: Do the size and shape of spatial units jeopardize economic geography estimations?

This paper evaluates, in the context of economic geography estimates, the magnitude of the distortions arising from the choice of a specific zoning system, which is also known as the Modifiable Areal Unit Problem (MAUP). We undertake three standard economic geography exercises (the analysis of spatial concentration, agglomeration economies, and trade determinants), using various French zoning systems differentiated according to the size and shape of their spatial units. While size might matter, especially when the dependent variable of a regression is not aggregated in the same way as the explanatory variables and/or the zoning system involves large spatial units, shape does so much less. In any case, both dimensions are of secondary importance compared to specification issues. (c) 2009 Elsevier Inc. All rights reserved.