An Explicit Spatial Approach to the Value of Local Social Amenities in Metro and Non-Metro Counties in the U.S.: Implications for Comprehensive Wealth Measurement
Round 1
Reviewer 1 Report
I read the paper with interest. However, I find that, in its present form, it needs some major revisions before being published.
My detailed comments follow.
My feeling is that the originality and value added of the work should be pointed out more clearly in the abstract and in the introduction.
I have some concern about the IV approach as it is presented in Section 6. It is possibly that the story is just expressed unclearly. If this is the case, a rephrasing will solve the issue. Lines 235-236 are wrong, since the instrument must indeed be uncorrelated with the error term (line 235), but it does not have to be “highly correlated with the dependent variable”. Rather, it has to be correlated with the dependent variable EXCLUSIVELY through the instrumented one. I think the related text should be made clearer.
My impression is that the explanatory variables should be described in greater depth (what they do represent, how they are measured, sources, maybe descriptive stats…).
Author Response
We appreciate the reviewer’s thoughtful feedback regarding the need for greater clarity as follows:
- Abstract and introduction
The reviewer says “the originality and value added of the work should be pointed out more clearly in the abstract and in the introduction” and thus we revised and added some into the abstract and the introduction as follows: in lines 24-26 “Our model explicitly estimates the spatial spillovers, and feedback effects of policy changes on local land values and wages. It also measures the differences in determinants of asset values and wages in metro from non-metro counties in the U.S.”, and in lines 88-92 “Together these modelling innovations lead to more accurate and precise estimates of the contributions of various components of comprehensive wealth to residents of metro and non-metro counties. These estimated contributions can then be used to fine tune and justify local policies related to taxation, public investments, conservation programs, and intergovernmental cooperation.”
- IV approach
We revised our explanation about the IV approach according to the reviewer’s suggestion as follow: in lines 259-260 “2) it has to be correlated with the dependent variable through the instrumented one.”
Reviewer 2 Report
Authors present a very interesting paper on the definition and the analysis of the comprehensive wealth framework, starting from the Roback’s general spatial equilibrium model. The practical implications in urban policies (one of the most related field to the main topic) are well defined in the discussion section. The paper is well written and the structure is clear (please, check the Journal guidelines for the creation of the draft - i.e. references). The main theme fits the scope of the Journal. In my opinion, the paper is valuable for the publishing.
Author Response
We appreciate that the reviewer comments about the value of our research.
Reviewer 3 Report
Dear authors,
I am grateful for the opportunity to read and comment on this interesting paper.
This paper investigates thourowly the link between wealth and market or non-market amenities underlining the importance of flow and stock capital and investments.
Furthermore, it highlights the importance of spatial interactions. The paper explains in detail the models used and the scientific results while mobilizing a rich bibliography.
The paper is well structured and very informative, the first part (introduction) and the second (Roback’s General Spatial Equilibrium Model) help the reader understand the scientific background while underlining the scope of the paper and introducing the data used for the analysis. Furthermore, the introductory part is well linked to the conclusions helping therefore the reader follow the text.
Very important to the latter is the third part of the paper presenting in detail the concept and sources of social amenities helping the reader understand the role of externalities (positive or negative). Last a fourth part seeks to explain the relationship among the different types of amenities.
Some comments concerning the first 4 parts of the paper:
- It would be interesting to consider further developing the role of social issues to migration briefly mentioned in lines 63-64 and in line 138. I believe that can help better understand the data analysis in part 7 where in line 290-291 the authors mention the spatial hedonic model. The explication given in lines 292-294 comes late in the text.
- In lines 151 – 160 the authors conclude that a series of investments could provide private benefits and social benefits. As a social benefit they identify a more equal distribution of income. This last point implies a resulting socioeconomic homogenization? I believe that this point could be further developed.
- In lines 106-107 the authors mention government economic development programs which could minimize costs of firms. Some examples could be helpful to the reader.
Parts 5&6 are well organized and do not need any improvement
The Data analysis part is well written and, in my opinion, does not need improvements.
- A comment here is the quality of the mapping, maybe the most important handicap of the paper. The legend is not informative and the differentiation between the different classes on the map is not clear. Undoubtedly, that is due to the difference in the counties surface between east and west.
I consider that the 8th part presents in detail the scope of the analysis and the different étapes followed while the tables are very informative.
- The only issue that I can rase here, as a more general comment that could maybe interest the authors, is the lack of information about the internal distribution of variables used within the counties. Population density for example.
Concerning the conclusions, they are comprehensive and well linked to the introduction. The appendixes are also very helpful.
Author Response
We appreciate the reviewer’s helpful suggestions regarding more examples for supporting the details and the results in this study. We have made the following changes:
- Further developing the role of social issues to migration briefly in lines 63-64 and in line 138
We added the following explanations in lines 155-158: “Based on the underlying logic of the spatial hedonic model, workers are willing to accept somewhat lower incomes if they can live in places that provide better amenities. This includes social amenities such as income distribution.”
- Socioeconomic homogenization
We added the following in lines 180-184: “Empirically, the significance and sign of the GINI coefficient would suggest that workers prefer to live in communities with less divergence of income. This may predict a process of socioeconomic homogenization, but more importantly, it suggests that communities that reduce poverty will be more attractive to both lower and higher income workers.”
- Examples for government economic development programs, which could minimize costs of firms
We listed some potential policies such as taxation policy, public investments, conservation programs, and intergovernmental cooperation in the last paragraph of the introduction. And we have added the following in lines 121-123: “minimum wages and poverty reduction programs, and improvements in public infrastructure and telecommunications”.
- Information about the internal distribution of variables used within the counties
We understand that the reviewer would like the means and standard deviations to be included in our tables. We can do this, although it will take some time. Please let us know if this is considered essential and, if so, how long we would have to make this change.
Round 2
Reviewer 1 Report
The author(s) did not reply to my following comment:
"My impression is that the explanatory variables should be described in greater depth (what they do represent, how they are measured, sources, maybe descriptive stats…)"
Author Response
We appreciate the reviewer’s helpful suggestions regarding more depth explanations for variables. We made the following changes:
- Further information about dependent variables
We added the following in lines 346-353: “Expected average income has mean values 46,677.61 for nation, 511,180. for metro, and 43,993, 65 for non-metro.”, and in lines 409-414: “Expected average rents have mean values, 12,498.28 for nation, 15,293 for metro, and 10,832 for non-metro. More information for other variables (e.g., how to measure, sources, and descriptive statistics) are included in Appendix.”
- Descriptive statistics for variables other than dependent variables
We added Tables A1 (description and sources of climate, geography, and environmental variables), A1-1 (descriptive statistics for climate, geography, and environmental variables), A2 (description and sources of quality/outcomes of public services), A2-1 (Descriptive Statistics for Quality/Outcomes of Public Services), A3 (description and sources of county’s general characteristics), A3-1 (Descriptive Statistics for County’s General Characteristics), A4 (description and sources of other social amenities), and A4-1 (Descriptive Statistics for Other Social Amenities) for Nation, Metro, and Non-metro regions.
