Searching for Isard’s Regional Essence

At the inception of the Southern Regional Science Association in the early 1960s, Walter Isard maintained that areal regions are fundamental units of observation and analysis. To this day, understanding the special significance of regions motivates much of our empirical research. In my address, I argue that regional fixed effects estimates from regression analysis can help us comprehend the distinctive character of areal units. This paper offers two examples from my research. First, I present the results of a regression model that explains regional knowledge spillovers in U.S. counties. Santa Clara County (the Silicon Valley) has by far the largest fixed effect estimate of any U.S. county. Overall, the county level fixed effects for knowledge spillovers follow a pattern of rapid exponential decay. Next, I inspect neighborhood fixed effects taken from a hedonic housing price model of the Charleston, South Carolina region. The results suggest a clear preference for coastal proximity as reflected in housing prices. For neighborhoods away from the coast, the fixed effects estimates exhibit a steep decline toward zero. Like the Silicon Valley’s regional advantage in knowledge, beachfront neighborhoods benefit from an exclusive, time invariant advantage that is hard, if not impossible, to replicate in space.