Ben Maran

Professor Storchmann
Urban Economics
10/14/16
Problem Set #2
(1):
Year

CR4

HHI

GINI

1998

29.9%

0.04

0.75

2006

25.8%

0.03

0.73

2009

24.2%

0.03

0.72

2013

24.4%

0.03

0.73

1998

44.6%

0.10

0.89

2006

25.8%

0.07

0.88

2009

24.2%

0.06

0.85

2013

24.4%

0.05

0.86

Employment

Annual Payroll

I found each CR4 by adding the largest 4 counties by market share together and
dividing by the total market share. So for example, for the year 1998 in
Employment, my CR4 was the top 4 countys shares of the employment market
added together (49755 + 78391 + 90383 + 228720) divided by the total
employment market (1494346). This equals .299, or 20.9%.
I found the HHI Index by calculating the shares of the market that each county had
and then squaring the value. After getting all of these values, I added them all
together to get the HHI. Due to rounding, tons of the data points were essentially
zero, so it makes sense that the HHI Employment and Payroll numbers are super
small.
I found the Gini through the normal steps to find a Gini, and I show these steps in
my answer to number two. I followed these same steps to find the Gini Coefficients
for number one!

(2):

Count
y

Jobs

10

10

15

25

25

100

180

Lorenz Line of Differen

Share
Curve
ED
ce
0.0135 0.0135
14
14
0.125
0.111
0.0270
27
0.041
0.250
0.209
0.0270
27
0.068
0.375
0.307
0.0405
41
0.108
0.500
0.392
0.0675
68
0.176
0.625
0.449
0.0675
68
0.243
0.750
0.507
0.2702
7
0.514
0.875
0.361
0.4864
86
1.000
1.000
0.000

Total of
the
Differen
ces
2.34

Gini coefficient of job concentration:

(Total of the Differences between Lorenz Curve and Line of ED)(1 / # of
counties)(2) =
(2.34)(1/8)(2) = .582

(3):

A = (20/94) / (69/249) = .7678

B = (6/48) / (28/249) = 1.111
C = (6/48) / (20/249) = 1.556

(4):
Labor force = 15
Boom: P = 100 - Q P = 100 - 15 = 85
Recession: P = 80 - 2Q P = 80 - (2)(15) = 80 - 30 = 50
CSBOOM = (100 - 85)(0.5)(15) = 112.5

CSRECESSION = (80-50)(0.5)(15) = 225

CSEXPECTED= (112.5 + 225) / 2 = 168.75

Expected average wage = (0.5)(85) + (0.5)(50) = 42.5 + 25 = 67.5

WagesBOOM 100-Q = 67.5 100-67.5 = Q Q = 32.5

WagesRECESSION 80-2Q=67.5 80-67.5 = 2Q Q = 12.5 / 2 Q = 6.25

Workers EmployedBOOM = (0.5)(100-67.5)(32.5) = 528.125

Workers EmployedRECESSION = (0.5)(80-67.5)(6.25) = 39.062
Workers EmployedEXPECTED= (528.125 + 39.062) / 2 = 283.593

(5):

A = We find high Gini coefficients in areas of high population.

B = Loving county has the lowest population in the country as well as the
lowest Gini coefficient.
C = .430