Like most other states in the U.S., Michigan recently began addressing the problem of climate change. The Michigan initiative involves combining a stakeholder process and technical analyses to formulate a climate action plan. This paper reports on how regional scientists collaborating with facilitators of the policy-making process and state government decision-makers addressed two key aspects. First is the choice and design of policy instruments to use to implement greenhouse gas (GHG) mitigation and sequestration. Second is the decision on whether the state should pursue its target for net GHG reduction on its own or in cooperation with other states. We summarize the results of applying a formal model for analyzing the implications of alternative environmental policy instruments. The model was applied to data on the costs and applicability of a spectrum of GHG reduction options developed by a consensus of stakeholders from all segments of the Michigan population. We recommended that a combination of regulatory and market incentive-based policies be implemented and that Michigan join with other Midwestern States in developing the cap and trade aspect of its climate action plan.

Regional scientists, with their experience investigating social and economic phenomena at different levels of aggregation, awareness of the importance of the role public and private institutions in society, and interdisciplinary tool box, are particularly well suited to provide rural policy advice to state and local governments. In spite of this, there are those who argue that faculty neglect state rural policy (SRP) research. This article explores this question and ties answers and recommendations to incentives faced by faculty and their institutions.

While there is a growing econometrics literature on the modeling of conflict and the interactions with trade, there has been relatively little evidence modeling the interregional migration behavior of individuals internally displaced by conflicts. The current article models the flows of households forced to leave their residence because of violent conflicts in Colombia. Results shed light on the main determinants of what we call journey to safety. Violence appears to be one of the most relevant pushing effects together with the absence of institutions and the dissatisfaction with the provision of basic needs. Furthermore, for regions with extreme violence levels, individuals appear to be willing to relocate to more distant locations. On the destination side, most populated regions are more attractive as well as areas with a sufficient level of fulfillment of basic needs.

This article evaluates different strategies for forecasting Spanish inflation using information from price series for fifty-seven products and eighteen regions in Spain. We consider vector equilibrium correction (VeqCM) models that include cointegration relationships between Spanish prices and prices in the regions of Valencia, Andalusia, Madrid, Catalonia, and the Basque Country. This approach is consistent with economic intuition and is shown to be of tangible importance after suitable econometric evaluation. It is found that sectoral disaggregate models are useful for forecasting inflation in the five largest Spanish regions. Moreover, aggregate inflation forecasts in Spain can be significantly improved by aggregating projections from different sectors and geographical areas and by considering cointegration relationships between regional and national prices. However, in spite of the existence of long-run relationships between sectoral and national prices, they include deterministic components that are not consistent with the law of one price.

This article probes the many ways in that regional scientists can be policy relevant at a state level focus. Personal anecdotes are used to illustrate the many ways we serve in this capacity, while still acting as the type of researchers that Walter Isard envisioned we would be at the outset of our field. It concludes with recommendations on how regional scientists can engage in the joys of being more policy relevant, but warns that the path is not always compatible with a tenure track.

An important area of regional science has long been location analysis and modeling. Its significance continues, now more formally known as location science, and has evolved because of the need to address complex facility siting problems and issues. This article focuses on classic coverage location problems, and how advances along theoretical and methodological fronts have enabled such problems to be viewed in new ways. Specifically, notions of implicit and explicit coverage, along with geographic information systems (GIS), provide the capacity to reconceptualize as well as better model intended planning goals and objectives. This article reviews covering problems and presents a comparative framework for both linkage and assessment. This research is significant because evolving models enable issues of frame independence, and the modifiable area unit problem, to be addressed, making planning and analysis more reliable and valuable.

Has the introduction of the Euro reduced the economic significance of national borders across the Euro Area? This article extends Engel and Rogers well known work on border effects to cities across Western Europe over the period 1995–2004. Although cross-border prices across the Euro Area are still more volatile than within-country prices, the importance of the border has diminished since the euro was introduced in 1999. The impact of the common currency on the border effect varies by country size, with the largest decreases occurring between larger Euro countries. Although cross-border price volatility has not changed between the United Kingdom and large Euro countries, volatility has actually increased between the small Euro countries and the United Kingdom. These results are consistent with the fact that exchange rates are more likely to adjust to price differentials between small countries than between large countries.

The article aims at providing a suitable measure of total factor productivity (TFP) levels within the conditional convergence framework by introducing unobserved heterogeneity in terms of a "mapping model". Our goal is twofold. First, we develop a generalized maximum entropy estimation procedure to account for ill-posed and ill-conditioned inference problems in estimating a conditional convergence regression with fixed effects and heterogeneous coefficients across regions. Second, we provide an endogenous spatial representation of unobserved fixed effects by using a multidimensional scaling technique. The proposed approach is applied to assess the existence of catching-up across Italian regions over the period 1960–1995 and to identify the effects of technology and geographic spillovers on the determination of TFP levels.

Office location has important impact on urban form and the transportation system in urban areas. One of the ways to study office location decisions uses surveys of managers and owners of office firms regarding the firm location decision process. The following article presents an analysis of the results gathered in Survey of Office Location Decisions (SOLD)—a Web-based retrospective survey, designed to provide some insight into location decision making of office firms. The main conclusion of the article is that office firms participating in the survey (mainly small and medium sized offices) exhibit a satisficing rather than utility maximizing location decision making. In addition, the results indicate that agglomeration has only a minor role in location decisions by office firms.

This article examines the extent to which US producers of durable goods outsource design and development work to external organizations. Evidence from a sample of sixty-eight large manufacturing companies suggests that independent design consultancies and other design service vendors contribute significantly to the product development efforts of major corporations. External organizations are increasingly expected to deliver innovative design solutions with respect to materials selection, aesthetics, ergonomics, product performance, and ease of manufacture. These vendors vary from single-person establishments to firms that employ over 500 people. We find that the outsourcing of industrial design has been driven primarily by the ability of external companies to offer innovative services that complement the core competencies of client firms. Our data also point to the rising importance of design service imports, notably from the United Kingdom, France, and Italy. Such imports currently account for about 35 percent of externalized design expenditures, compared to less than 15 percent ten years ago.