You conduct a study of a growth industryin a large number of urban areas and findthat ln ð Þ¼ E1 E0 0:44 þ 0:62 ln E0 þ 0:48 Pop þ ...

whereE0 is employmentintheindustryinthe base year,E1 is employmentin a subsequent year, Pop is population of the urban area, and . . . stands for other variables that have been included in the study.

a. Is this industry subject to dynamic localization economies? Why? What is the magnitude of the effect, if any?

b. Do these results tell us whether the industry is subject to static localization economies? Why or why not?

c. Is this industry subject to dynamic urbanization economies? How do you know?