Jesus Lopez Rodriguez, Ph.D., Economic Analysis and Business Administration, University of A Coruņa, Facultad de CC.EE y Empresariales, Campus de Elvina s/n. C.P.: 15071, A Coruna, 15071, Spain and Maria Cecilia Acevedo, PhD, candidate, John F. Kennedy School of Government, 79 John F. Kennedy Street, Cambridge-Massachussets, MA 02138.
In this paper we derive and estimate a New Economic Geography model for the Colombian Departments. In first place we derive an econometric specification relating wages to a distance weighted sum of the volumes of economic activities of the surrounding locations. Then, we test our econometric specification with data for the Colombian departments along the period 1975-2000. The empirical results confirm the theoretical predictions of our model, showing that market access is a key variable to explain the spatial distribution of wages in ColombiaKey words: New Economic Geography, Spatial Structure of Wages, market Access
JEL Classification: R11, R12, R13, R14, F12, F23