Market access and wages: A spatially heterogeneous approach

We empirically test the positive relationship between market access and wages stated by New Economic Geography. Contrary to most estimations in other countries, we find evidence of significant spatial heterogeneity of this elasticity across Chilean communities.

► We test the relationship stated by NEG between market access and wages for Chile. ► Market access-wage elasticity is low and heterogeneous for Chilean communities. ► The Metropolitan region, the main country's agglomeration presents a positive elasticity. ► Southern communities present a negative elasticity with low MA and high wages. ► Communities with natural endowment do not follow the NEG theoretical relationship.