Spatial economy and the geography of functional economic areas

Abstract

The spatial economy can be visualised as a web of overlapping markets or functional areas linked to different activities. Unfortunately, very often administrative regions and local authority areas are used as proxies for functional areas, but they have serious shortcomings for spatial economic analysis and the implementation of local policies. The spatial economy is viewed here as a complex network of economic flows within a hierarchical urban system. This paper constructs a comprehensive geography of functional economic areas by first using consistent criteria based on commuting and migration flows for England. The analysis next superimposes a central place hierarchy derived from retail sales and office centre rents. It then classifies these functional economic areas offering insights into the spatial economy of England. The geography queries the relevance of core/surrounding models of urban form as large local labour market areas comprise in some cases more than 20 housing market areas. While the research uses England as a case study, the analysis is of generic significance to the spatial economies of developed countries. The paper also raises a number of methodological and data issues for further development.