Associate Professor
Steven Bond-Smith
University of Hawaiʻi Economic Research Organization (UHERO), University of Hawaiʻi at Mānoa
I am Associate Director and Associate Professor at UHERO. I am a co-editor of Spatial Economic Analysis and a Productivity Fellow at The Productivity Institute in the United Kingdom.
My research examines how distance and scale shape productivity and growth, with emphasis on small and isolated economies such as Hawaiʻi. Recent work models how working from home reshapes urban systems, and how internal migration affects manufacturing productivity. In Hawaiʻi my main work is on economic development and diversification: why the economy has grown slowly, where it could realistically diversify, and what policy can do about it.
I serve on Hawaiʻi's State Planning Act Task Force, the Tourism and Gaming Working Group, the Oʻahu Workforce Development Board, and the UK Department for Transport's Shadow Joint Analysis Development Panel.
What I work on
Distance, scale and growth
Economic growth theory implies different outcomes for different places when it properly accounts for location, distance, and increasing returns to scale. I develop and examine such models to derive implications for smaller and more isolated economies like Hawaiʻi.
Work from home and economic geography
I treat commuting or working at home as a decision variable for workers and employers to examine the implications for location decisions. This produces a shadow effect, where smaller cities lose activity to the hinterlands of larger ones.
Economic development policy in Hawaiʻi
Hawaiʻi's economy is highly specialized and has grown slowly for decades. I work on understanding its economic performance while accounting for local prices, identifying where it could realistically diversify, and designing tailored economic policies to support growth and diversification.
Selected work
A few things worth reading first
A short selection across the theory, the empirical work and the reports. The full record is on the research and reports pages.
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Beyond the price of paradise: Is Hawaiʻi being left behind?
UHERO Report, 2026
Supported by the Hawaiʻi Business Roundtable
Published version UHERO Insights UHERO Focus video
In the pressSFGate, Aloha State Daily, Honolulu Civil Beat, Hawaii News Now, KITV News, Pacific Business News, Maui Now, Aloha State Daily, Kauaʻi Now, Big Island Video News, AsAmNews, Prism News, Hoodline, KHON2 News, University of Hawaiʻi News, Star Advertiser
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Estimating a CPI-based regional price parity index for US cities
Urban Studies, 2026
Abstract
Geographic price differences confound comparisons of economic performance across cities by conflating nominal urban advantages with real differences in well-being. Existing tools only partially address this problem: the Bureau of Economic Analysis publishes a Regional Price Parity (RPP) Index that represents relative price levels in US cities and states, but it is available only annually since 2008 and with a publication lag, limiting its usefulness for historical or high- frequency analysis. To address this measurement gap, we use the Consumer Price Index (CPI) for 29 US cities to construct a CPI-based RPP, enabling consistent comparisons of urban economic performance over time at constant and comparable prices. We exploit standard price-parity properties using publicly available CPI data to estimate CPI-based RPPs at a higher frequency and over longer historical horizons. This results in a CPI-based RPP for any period with published CPI data, as far back as 1913 in some cities to the most recent observations. By separating nominal urban advantages from cost-of-living differences, the index allows researchers to reassess claims about urban well-being, affordability, and the real returns to agglomeration. We demonstrate the index by examining long-run regional price dynamics and comparing real per capita GDP and real per capita personal income across cities at constant and comparable prices.
Published version Working paper (PDF) Interactive data tool: CPI-based RPP estimates
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Shadows and donuts: The work-from-home revolution and the performance of cities
Journal of Regional Science, 65(5), pp. 1401-1422, 2025
Abstract
In this article, we set out the relationships between the behavioral and spatial responses to working from home. The analytical framework centres explicitly on the choice of commuting frequency as the key decision‐making variable that endogenously reshapes the relationships between other spatial and nonspatial variables as a result of the work‐from‐home revolution. We find that optimal commuting frequency is positively related to the opportunity costs of less‐than‐continuous face‐to‐face interaction and inversely related to commuting costs. As well as a “ donut effect” with growth in the suburbs and hinterlands around cities, our results also identify a “shadow effect” in smaller cities. The reason is that, somewhat counterintuitively, commuting frequency optimisation magnifies the benefits of working from home in larger cities because of a greater decrease in the burden of commuting. Our results imply enhanced productivity of larger cities over smaller cities, suggesting that the economic divergence between large cities and left‐behind places is likely to persist.
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Potential opportunities to diversify the economy of Hawaiʻi
UHERO Report, 2024
Published version UHERO Insights
In the pressHonolulu Civil Beat, Maui Now, Star Advertiser, Hawaii News Now, KITV Island News, KITV Island News, Big Island Now, Hawaiʻi Free Press, Kauaʻi Now, Hawaiʻi Public Radio, University of Hawaiʻi News, Hawaii News Now
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Combining agglomeration economies and endogenous growth without scale effects
Spatial Economic Analysis, 19(3), pp. 287-308, 2024
Abstract
Increasing returns to scale is essential to both spatial economics and macroeconomic growth. Spatial externalities imply external local increasing returns that generate an uneven spatial distribution of economic activity. While non-rival knowledge also implies increasing returns – in order to endogenise growth – this is not a spatial micro- foundation. Spatial theories of growth must be carefully specified to avoid unintended conclusions about the spatial economy and scale effects. This is demonstrated with a spatial endogenous growth model without scale effects that includes a spatial mechanism that facilitates agglomeration economies for innovation. In this class of models that combine spatial mechanisms with endogenous growth without scale effects, local increasing returns to scale imply that productivity, growth and interest rates are functions of the economy’s spatial distribution, but not its scale.