A Regional Core, Adjacent, Periphery Model for National Economic Geography Analysis

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geographic common market. The introduction of the adjacent region provides a continuum of
production locations between the core and periphery regions. Each region type should reflect a vector
of demographic and economic variables, whose values are in harmony with the theme of von Thünen’s
(1842) concentric circle theory.

The following statistical analysis is a general assessment of the CAP theory by applying it to
the EU regions as they are classified by region type. The CAP structure is a model of national regional
centrality. All countries in the union have CAP type regions. The CAP region types represent the true
population of EU core, adjacent, and periphery regions. The objective of the statistical analysis is
twofold. First, to determine whether the data supports von Thünen’s concentric circle theme, and
hence, the CAP structure in the countries of the common market. Second, whether the economic
geography effects of trade liberalisation are evident in changes in regional demographic and economic
data ex ante and ex post EU 1992. The analytical outcomes are expected to provide preliminary
answers to theoretical issues raised in the new economic geography literature (Krugman, 1991b).

8.1 Methodology

Each administrative core, adjacent, and periphery region is described by characteristic vector
of demographic and economic data. The following data series is used for each of the EU
administrative region types: population density (total regional population divided by the region’s
square kilometre geographic area), total population, the index of regional per capita income in PPS,
and the structure of the labour force in each region (percentage distribution of labour employed in
agriculture, manufacturing, and services)¹⁸. The average value of each data series for each of the
region types is calculated.

Economic integration has created a new larger geographic market with multiple CAP regions.
By summing over all the countries in the union equation (9) becomes the following:

The data source is listed in Section 4.3.

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