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Information Technology and the Future of Cities

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  • Jess Gaspar
  • Edward Glaeser

Abstract

Will improvements in information technology eliminate face-to- face interactions and make cities obsolete? In this paper, we present a model where individuals make contacts and choose whether to use electronic or face-to-face meetings in their interactions. Cities are modeled as a means of reducing the fixed travel costs involved in face-to-face interactions. When telecommunications technology improves, there are two opposing effects on cities and face-to-face interactions: some relationships that used to be face-to-face will be done electronically (an intuitive substitution effect), and some individuals will choose to make more contacts, many of which result in face-to-face interactions. Our empirical work suggests that telecommunications may be a complement, or at least not a strong substitute for cities and face-to-face interactions. We also present simple models of learning in person, from a written source, or over the phone, and find that interactive communication dominates other forms of learning when ideas are complicated.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 5562.

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Date of creation: May 1996
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Publication status: published as Journal of Urban Economics, Vol. 43, no. 1 (January 1998): 136-156
Handle: RePEc:nbr:nberwo:5562

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  1. Jaffe, Adam B & Trajtenberg, Manuel & Henderson, Rebecca, 1993. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 108(3), pages 577-98, August.
  2. Paul Krugman, 1990. "Increasing Returns and Economic Geography," NBER Working Papers 3275, National Bureau of Economic Research, Inc.
  3. Ota, Mitsuru & Fujita, Masahisa, 1993. "Communication technologies and spatial organization of multi-unit firms in metropolitan areas," Regional Science and Urban Economics, Elsevier, vol. 23(6), pages 695-729, December.
  4. Rosen, Sherwin, 1981. "The Economics of Superstars," American Economic Review, American Economic Association, vol. 71(5), pages 845-58, December.
  5. Glaeser, Edward L & Mare, David C, 2001. "Cities and Skills," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 19(2), pages 316-42, April.
  6. Jovanovic, Boyan, 1979. "Job Matching and the Theory of Turnover," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 87(5), pages 972-90, October.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Face to Face Contact and the Internet are Complements: The Case of Brazil's Carnival
    by Matthew E. Kahn in Environmental and Urban Economics on 2012-02-18 15:12:00
  2. Are Cities and the Internet Complements or Substitutes?
    by Matthew E. Kahn in Environmental and Urban Economics on 2012-05-28 15:20:00
  3. How Will Participating Universities Make $ From Offering Free Web Courses on Coursera?
    by Matthew Kahn in Environmental and Urban Economics on 2012-07-20 13:40:00
  4. Amazon Fresh and the Rise of the Consumer City
    by Matthew Kahn in Environmental and Urban Economics on 2013-07-31 02:37:00
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