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Welcome to my website

Thilo R Huning

Senior Lecturer in Economics at the University of York

Economic History · Political Economy · Economic Geography

I'm senior lecturer in economics at the University of York, interested in the long-run determinants of modern growth and inequality between states, groups, and across space.

My Research

"You Reap What You Know: Appropriability and the Origin of European States", joint with Fabian Wahl. European Journal of Political Economy

Geography provides some states with a higher level of soil quality than others, and in addition has allowed some historical states to appropriate agricultural output at lower costs. To test this empirically, we propose a new measure of appropriability: caloric observability. The idea behind this measure is that geography induces variation between states because their signals about agricultural output differ in precision. Caloric observability is robustly and significantly correlated with proxies of government success on three levels: Data on all European states 1300–1700, our new data set on the Holy Roman Empire 1150–1789, and a municipality-level data set of 1545 Duchy of Württemberg.

"How Britain Unified Germany: The Geoeconomics of Location and Trade Routes", joint with Nikolaus Wolf. R & R in Journal of Economic History

We analyze the foundation of the German Zollverein as an example of how geography can shape institutional change. We show how the redrawing of the European map at the Congress of Vienna 1815–notably Prussia's control over the Rhineland and Westphalia–affected the incentives for policymakers to cooperate. Our argument comes in three steps. First, we show that the new borders were not endogenous to trade. They were at odds with the strategy of Prussia in 1815, but followed from Britain's intervention at Vienna regarding the Polish-Saxon question. Second, we develop a theoretical framework, where state planners set tariffs on imports and transits to maximize revenue. We show that in a world with transit tariffs a revenue-maximizing state planner faces a trade-off between benefits from cooperation and the cost of losing the geographical advantage. In a third step, we calibrate the model combining historical data on tariffs, freight rates, market sizes with GIS data on lowest costs routes under endogenous tariffs. We then run counterfactuals to show how borders affected incentives: if Prussia would have succeeded with her strategy to gain the entire Kingdom of Saxony instead of the western provinces, the Zollverein would not have formed. We conclude that geography can shape institutional change. To put it differently, as collateral damage to her intervention at Vienna "Britain unified Germany''.

"The Fetters of Inheritance? Equal Partition and Regional Economic Development", joint with Fabian Wahl. European Economic Review

Did European regions industrialize first because their institutions fostered urbanization? We argue that culture, precisely an agricultural inheritance tradition that would immobilize the rural population, was no obstacle to economic growth (as commonly thought). Instead, equal partition tied excess labor to the land and fostered the establishment of a low-wage low-skill industry there. Using data for the German state of Baden-Württemberg, as well as for the whole of West Germany, we document that these equal partition areas are richer than primogeniture areas today. With a focus on identification, we conduct fuzzy spatial RDD regressions for 1895, the 1950s, and today. We find that inheritance rules caused

—in line with our theoretical predictions—higher incomes, population densities, and industrialization levels in equal partition areas. We document that equal partition reduced emigration. Results suggest that more than a third of the overall inter-regional difference in average per capita income in present-day Baden Württemberg—or 598 Euro—can be attributed to equal partition. The reasons for Europe's uniqueness do not lie in the supremacy of primogeniture, and have to be searched elsewhere.

"The origins of agricultural inheritance traditions", joint with Fabian Wahl. Journal of Comparative Economics

We investigate the origins of agricultural inheritance traditions, equal partition and primogeniture. Our case study is the German state of Baden-Württemberg. Our empirical findings suggest that rural inheritance traditions were primarily determined by geography. First, fertile soils allowed splitting of the land among siblings for longer and with fewer conflicts, and hence we find more equal partition in areas with higher soil quality, especially at elevation levels conducive to intensive agriculture. Second, geography determined the settlement pattern. Areas that were settled before the Middle Ages, when land was abundant and free, are more likely to apply equal partition today. In areas that were largely uninhabited until the Middle Ages, primogeniture is the norm. We argue that these areas were deforested with the obligation of primogeniture, imposed by feudal lords.

"Early and Medieval Periods in German Economic History", joint with Fabian Wahl. Oxford Research Encyclopedias: Economics and Finance

The study of the Holy Roman Empire, a medieval state on the territory of modern-day Germany and Central Europe, has attracted generations of qualitative economic historians and quantitative scholars from various fields. Its bordering position between Roman and Germanic legacies, its Carolingian inheritance, and the numerous small states emerging from 1150 onward, on the one hand, are suspected to have hindered market integration, and on the other, allowed states to compete. This has inspired many research questions around differences and communalities in culture, the origin of the state, the integration of good and financial markets, and technology inventions, such the printing press. While little is still known about the economy of the rural population, cities and their economic conditions have been extensively studied from the angles of economic geography, institutionalism, and for their influence on early human capital accumulation. The literature has stressed that Germany at this time cannot be seen as a closed economy, but only in the context of Europe and the wider world. Global events, such as the Black Death, and European particularities, such as the Catholic Church, never stopped at countries’ borders. As such, the literature provides an understanding for the prelude to radical changes, such as the Lutheran Reformation, religious wars, and the coming of the modern age with its economic innovations.

"Does regional identity guide investments? Evidence from German license plates ”, joint with Fabian Wahl

In this paper, we present novel data from the German-speaking area on 13,422 venture capital investments between 1999 and 2019, and document a novel and yet unexplained contributor to investors’ home bias. We propose a new measure of regional identity based on a recent vehicle license plate liberalization in Germany, and leverage on a unique dataset of historical borders to show how regional identity is formed. We use an instrumental strategy to establish a causal link between historical political instability, regional identity, and the home bias. Our results indicate that a common regional identity is highly relevant for investment decisions.

"Can Winegrowing Cause Rural Development? Evidence from Baden-Württemberg", joint with Fabian Wahl. Accepted at European Review of Economic History

Historical winegrowing shaped modern rural development, even in areas in which its cultivation was given up after the early modern period. We provide evidence for this idea from municipality level data on Southwestern German viticulture over the last 1,300 years, and find a significant link between historical
winegrowing and modern economic development. We rely on cross-sectional regressions and on an instrumental variable strategy using precipitation seasonality. Our findings highlight two mechanisms
through which historical viticulture affected modern development: by leaving behind a more egalitarian inheritance norm, and a more collectivist society.

"Safer but poorer in numbers: Violence and spatial misallocation in the Jim Crow South", joint with James Choy

People prefer to live near other members of their own racial groups. One reason for this preference is that racial communities protect their members from external threats
of violence. We identify revealed preferences for living near other members of the same racial group by estimating a structural model of migration. When threatened with violence, Black migrants in the 1930s US South have a stronger reference for destination locations with larger Black populations. Blacks face more wage discrimination in areas with larger Black populations, so the threat of violence induces Black
migrants to choose
destination locations that offer lower wages.

"Britain has had enough of experts? Social networks and the Brexit referendum", joint with Giacomo de Luca and Paulo Santos Monteiro

We investigate the impact of social media on the 2016 referendum on the United Kingdom membership of the European Union. We leverage 18 million geo-located Twitter messages originating from the UK in the weeks before the referendum. Using electoral wards as unit of observation, we explore how exogenous variation in Twitter exposure affected the vote share in favor of leaving the EU. Our estimates suggest that in electoral wards less exposed to Twitter the percentage who voted to leave the EU was greater. This is confirmed across several specifications and approaches, including two very different IV identification strategies to address the non-randomness of Twitter usage. To interpret our findings, we propose a model of how bounded rational voters learn in social media networks vulnerable to fake news, and we validate the theoretical framework by estimating how Remain and Leave tweets propagated differently on Twitter in the two months leading to the EU referendum.