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Uncovering the drivers behind urban economic complexity and their connection to urban economic performance

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      Abstract

      The distribution of employment across industries determines the economic profiles of cities. But what drives the distribution of employment? We study a simple model for the probability that an individual in a city is employed in a given urban activity. The theory posits that three quantities drive this probability: the activity-specific complexity, individual-specific knowhow, and the city-specific collective knowhow. We use data on employment across industries and metropolitan statistical areas in the US, from 1990 to 2016, to show that these drivers can be measured and have measurable consequences. First, we analyze the functional form of the probability function proposed by the theory, and show its superiority when compared to competing alternatives. Second, we show that individual and collective knowhow correlate with measures of urban economic performance, suggesting the theory can provide testable implications for why some cities are more prosperous than others.

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      Most cited references 36

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      Normalized cuts and image segmentation

       Jianbo Shi,  S J Malik (2000)
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        A Tutorial on Spectral Clustering

        In recent years, spectral clustering has become one of the most popular modern clustering algorithms. It is simple to implement, can be solved efficiently by standard linear algebra software, and very often outperforms traditional clustering algorithms such as the k-means algorithm. On the first glance spectral clustering appears slightly mysterious, and it is not obvious to see why it works at all and what it really does. The goal of this tutorial is to give some intuition on those questions. We describe different graph Laplacians and their basic properties, present the most common spectral clustering algorithms, and derive those algorithms from scratch by several different approaches. Advantages and disadvantages of the different spectral clustering algorithms are discussed.
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          ON A CLASS OF SKEW DISTRIBUTION FUNCTIONS

           Herbert Simon (1955)
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            Author and article information

            Journal
            06 December 2018
            1812.02842

            http://arxiv.org/licenses/nonexclusive-distrib/1.0/

            Custom metadata
            37 pages, 11 figures, 4 tables, 5 appendices
            physics.soc-ph nlin.AO q-fin.GN

            General physics, General economics, Nonlinear & Complex systems

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