GIS_and_economics_web.docVIP

Geographical Information Systems (GIS) and Economics Henry G. Overman (London School of Economics) 5th January 2006 Abstract: Geographical Information Systems (GIS) are used for inputting, storing, managing, analysing and mapping spatial data. This article consider the role each of these functions can play in economics. GIS can map economic data with a spatial component; generate additional spatial data as inputs to statistical analysis; calculate distances between features of interest and define neighbourhoods around objects. GIS also introduce economics to new data. For example, remote sensing provides large amounts of data on the earths surface. This data is of inherent interest, but can also provide an exogenous source of variation and allowing the construction of innovative instrumental variables. 1 Thanks to Steve Gibbons, Yannis Ioannides, and Diego Puga for comments. This article will appear in S. N. Durlauf and L. E. Blume, The New Palgrave Dictionary of Economics, forthcoming, Palgrave Macmillan, and is reproduced with permission of Palgrave Macmillan. This article is taken from the authors original manuscript and has not been reviewed or edited. The definitive published version of this extract may be found in the complete New Palgrave Dictionary of Economics in print and online, forthcoming. Geographical Information Systems and Economics Geographical Information Systems are used for inputting, storing, managing, analysing and mapping spatial data. In this article, we consider each of these functions to help assess the role that GIS can play in economic analysis. Of course, a wide range of software can provide similar functions for quantitative data so it is the geographical, or spatial, element that separates GIS. That spatial dimension will be the focus of this piece. One important aspect of GIS that will not be covered, is the choice of software. Standard texts, such as chapter 7 of Longley, Goodchild, Maguire and Rhind (2005) consider the questio